The UK has one of the fastest recovering economies in the world

7th May 2021

By Will Leyland

It was very hard to predict, going back 12 months, what sort of long-term impact the pandemic was likely to have on not just in the UK, but across Western democracies and the wider world.

There were more than a few providing very gloomy outlooks and, in many ways, that’s understandable when trying to forecast or predict economic performance during an unprecedented time with so many variables in play.

Ultimately, if you have a global pandemic that has effectively turned off the economic tap, you’re then trying to predict not only at what level the flow will return at, but also when it gets turned back on, and at what pace.

To be more specific, despite the fact that the UK economy was in good health pre-pandemic, it was left to economists and commentators to predict how people would behave when allowed to spend money again (free-for-all, or cautious), how quickly the economy would unlock in order to allow them (would it be protracted or quick), and then finally, how well the government performed on public health to get things under control.

Whether they did well or not is, of course, up for hot debate, however, something very important happened late last year that changed many people’s outlook – effective vaccines were approved for widespread use across the UK, Europe and the US.

We’d like to think that we broadly stayed consistent with our prediction of a V-shaped recovery, and it seems as though that prediction could be on course to be confirmed.

UK Recovery

New evidence is now emerging that the UK recovery is well underway and speeding ahead at one of the fastest rates in the world.

As reported by The Guardian, “the EY Item Club said it had upgraded its growth forecasts for 2021 after a stronger start to the year than expected and as rapid progress with the vaccine programme enables a swift return to relative normality. The group said it now expected GDP to grow by 6.8% in 2021 – a sharp upgrade on the 5% growth rate it had estimated in January – which would mark the fastest annual growth in national income since 1941.”

Further to that, Reuters also reported that the UK may grow faster than the US in 2021, too, saying “Britain looks set to see faster economic growth than the United States this year as the country races ahead with its vaccination programme, Goldman Sachs said. The bank said in a note to clients that it now expects British gross domestic product to grow by a “striking” 7.8% this year, “above our expectations for the U.S.”

UK economy and property

Again, this is pretty strong evidence of the V-shaped recovery we’ve been predicting for some time, and makes for very exciting news for UK investors, and especially property investors.

UK property last year grew more than 8% across the majority of the country, one of its strongest performances in decades, with rents, yields and prices growing together as huge demand clashed with a lack of supply.

If we consider that happening in the midst of a pretty historic economic slump in the UK, and during a pandemic, then what can we expect for 2021 and beyond?

Largely, it would be wise to assume that the government will continue to see UK property as a central plank in its recovery plan as we continue to emerge from lockdown restrictions, as it has protected the wealth of huge amounts of people in the UK.

With tax breaks, incentives and government intervention, it’s safe to bet on the property market continuing this trend over at least the next few years.

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The UK has one of the fastest recovering economies in the world

07 May 2021

It was very hard to predict, going back 12 months, what sort of long-term impact the pandemic was likely to have on not just in the UK, but across Western democracies and the wider world.

There were more than a few providing very gloomy outlooks and, in many ways, that’s understandable when trying to forecast or predict economic performance during an unprecedented time with so many variables in play.

Ultimately, if you have a global pandemic that has effectively turned off the economic tap, you’re then trying to predict not only at what level the flow will return at, but also when it gets turned back on, and at what pace.

To be more specific, despite the fact that the UK economy was in good health pre-pandemic, it was left to economists and commentators to predict how people would behave when allowed to spend money again (free-for-all, or cautious), how quickly the economy would unlock in order to allow them (would it be protracted or quick), and then finally, how well the government performed on public health to get things under control.

Whether they did well or not is, of course, up for hot debate, however, something very important happened late last year that changed many people’s outlook – effective vaccines were approved for widespread use across the UK, Europe and the US.

We’d like to think that we broadly stayed consistent with our prediction of a V-shaped recovery, and it seems as though that prediction could be on course to be confirmed.

UK Recovery

New evidence is now emerging that the UK recovery is well underway and speeding ahead at one of the fastest rates in the world.

As reported by The Guardian, “the EY Item Club said it had upgraded its growth forecasts for 2021 after a stronger start to the year than expected and as rapid progress with the vaccine programme enables a swift return to relative normality. The group said it now expected GDP to grow by 6.8% in 2021 – a sharp upgrade on the 5% growth rate it had estimated in January – which would mark the fastest annual growth in national income since 1941.”

Further to that, Reuters also reported that the UK may grow faster than the US in 2021, too, saying “Britain looks set to see faster economic growth than the United States this year as the country races ahead with its vaccination programme, Goldman Sachs said. The bank said in a note to clients that it now expects British gross domestic product to grow by a “striking” 7.8% this year, “above our expectations for the U.S.”

UK economy and property

Again, this is pretty strong evidence of the V-shaped recovery we’ve been predicting for some time, and makes for very exciting news for UK investors, and especially property investors.

UK property last year grew more than 8% across the majority of the country, one of its strongest performances in decades, with rents, yields and prices growing together as huge demand clashed with a lack of supply.

If we consider that happening in the midst of a pretty historic economic slump in the UK, and during a pandemic, then what can we expect for 2021 and beyond?

Largely, it would be wise to assume that the government will continue to see UK property as a central plank in its recovery plan as we continue to emerge from lockdown restrictions, as it has protected the wealth of huge amounts of people in the UK.

With tax breaks, incentives and government intervention, it’s safe to bet on the property market continuing this trend over at least the next few years.

Will Leyland

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