COVID-19 savings set to boost UK economy

17th February 2021

By Will Leyland

The UK is a coiled spring. That was the term used by the Bank of England this week, at least.

As the nation plots its way out of the restrictions that have been in place for the best part of a year, there seems to be a palpable sense of relief and optimism sweeping the country as people start to dare to dream of summer, holidays and normality.

With vast areas of the country having been kept indoors for most of the winter, there’s understandably something of a pent-up desire to spend like crazy all over the economy once things are back to normal.

The government have announced that they are going to brief their roadmap out of restrictions next week which many are expecting to provide details of when certain sections of the economy will be released.

Most commentators have said that they’re expecting most of the economy to be back to full power by the end of spring, with the UK’s vaccination programme proving to be one of the most successful in the world as it currently stands.

Many are now predicting that the entire adult population will have been offered their first vaccine before the start of summer in June, which would mark a quite remarkable success for the government if that were the case.

Bank of England

In an article for the Daily Mail, chief economist Andy Haldane said ‘The recovery should be one to remember, after a year to forget,’ he writes today. ‘A year from now, annual growth could be in double-digits.’

Haldane also predicted that by the end of June households will have amassed ‘accidental savings’ adding up to a massive £250billion.

He went on to predict that huge amounts would be spent socialising, seeing friends, and rescuing struggling industries such as hospitality and the travel industry. These are areas that have been under enormous pressure but seem set to bounce back.

UK Property

What does this mean for property then? Well, if we work on the basis that, despite restrictions and limits on what people could do, the UK property sector boomed in the last year, with prices rising quickly along with rents and demand.

We’ve already seen in the early part of this year that demand has remained high even though there were many who’d predicted that the pent-up demand would explode and then fizzle out.

New build projects are already ramping up before lockdown has been fully lifted and in city and town centres there has been little if any drop off in demand for Private Rental Sector (PRS) housing with many still planning on moving into urban centres.

The Bank of England have now publicly stated their confidence that the economy is set to bounce back stronger than ever, so if we accept that the UK property sector was booming in a (temporary) recession, then it begs the question of what might happen through this year, once the handbrakes are taken off and it’s allowed to go full throttle.

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COVID-19 savings set to boost UK economy

17 February 2021

The UK is a coiled spring. That was the term used by the Bank of England this week, at least.

As the nation plots its way out of the restrictions that have been in place for the best part of a year, there seems to be a palpable sense of relief and optimism sweeping the country as people start to dare to dream of summer, holidays and normality.

With vast areas of the country having been kept indoors for most of the winter, there’s understandably something of a pent-up desire to spend like crazy all over the economy once things are back to normal.

The government have announced that they are going to brief their roadmap out of restrictions next week which many are expecting to provide details of when certain sections of the economy will be released.

Most commentators have said that they’re expecting most of the economy to be back to full power by the end of spring, with the UK’s vaccination programme proving to be one of the most successful in the world as it currently stands.

Many are now predicting that the entire adult population will have been offered their first vaccine before the start of summer in June, which would mark a quite remarkable success for the government if that were the case.

Bank of England

In an article for the Daily Mail, chief economist Andy Haldane said ‘The recovery should be one to remember, after a year to forget,’ he writes today. ‘A year from now, annual growth could be in double-digits.’

Haldane also predicted that by the end of June households will have amassed ‘accidental savings’ adding up to a massive £250billion.

He went on to predict that huge amounts would be spent socialising, seeing friends, and rescuing struggling industries such as hospitality and the travel industry. These are areas that have been under enormous pressure but seem set to bounce back.

UK Property

What does this mean for property then? Well, if we work on the basis that, despite restrictions and limits on what people could do, the UK property sector boomed in the last year, with prices rising quickly along with rents and demand.

We’ve already seen in the early part of this year that demand has remained high even though there were many who’d predicted that the pent-up demand would explode and then fizzle out.

New build projects are already ramping up before lockdown has been fully lifted and in city and town centres there has been little if any drop off in demand for Private Rental Sector (PRS) housing with many still planning on moving into urban centres.

The Bank of England have now publicly stated their confidence that the economy is set to bounce back stronger than ever, so if we accept that the UK property sector was booming in a (temporary) recession, then it begs the question of what might happen through this year, once the handbrakes are taken off and it’s allowed to go full throttle.

Will Leyland

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