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UK economy set to be one of the last to recover from pandemic

Annual FT survey of leading economists warns of ‘groaning twenties’, with soaring unemployment and a return to austerity likely

It will take at least 18 months for the UK economy to return to its pre-pandemic size and its recovery will lag behind that of its peers, according to a poll of more than 90 leading economists.

The vast majority of those responding to the FT’s annual survey said UK GDP would not regain its previous level until the second half of 2022, or later. Many said political mismanagement of both the Covid-19 crisis and of Brexit had ensured the UK would underperform other richer countries — and that the biggest risk to the economy in 2021 was that an over-thrifty chancellor would damage the recovery by tightening fiscal policy too early.

Britain has a bigger hill to climb than others because its economy suffered more in the early stages of the pandemic — a fact that Diane Coyle, professor at Cambridge university, ascribed partly to “indecisive or inadequate policy responses”, while Vicky Pryce, at the Centre for Economics and Business Research, blamed “the lateness of the lockdown measures and an appalling communications strategy”.

Swati Dhingra, associate professor at the London School of Economics, predicted “an initial optimistic uptick from a Brexit deal and then a longer period over which reduced market access starts to come into play”...

“The Covid-19 vaccine(s) will prove a shot in the arm for both the UK economy and its peers. But Brexit will be a shot in the foot,” said John Philpott, an independent consultant.

https://www.ft.com/content/5c51299a-...6-a42a6317c324