{"id":134829,"date":"2021-03-18T13:31:29","date_gmt":"2021-03-18T12:31:29","guid":{"rendered":"https:\/\/www.vuelio.com\/uk\/?p=134829"},"modified":"2021-03-18T13:31:29","modified_gmt":"2021-03-18T12:31:29","slug":"covid-19-weekly-economy-summary-18-march","status":"publish","type":"post","link":"https:\/\/www.vuelio.com\/uk\/blog\/covid-19-weekly-economy-summary-18-march\/","title":{"rendered":"COVID-19: Weekly Economy Summary \u2013 18 March"},"content":{"rendered":"

The Economy Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can\u00a0sign up to receive your copy here<\/a>.<\/strong><\/p>\n

Office for National Statistics (ONS) data for January suggests that the economy was\u00a0hit less<\/span>\u00a0by the renewed lockdown than expected. UK GDP is\u00a0<\/span>estimated<\/span><\/a>\u00a0to have fallen by 2.9% in January 2021 compared to the predicted 5%. The output approach to GDP shows that January\u2019s level was 9% below that seen in February 2020 and was 4% below levels seen in October 2020 \u2013 the initial recovery peak.<\/span>\u00a0<\/span><\/p>\n

The National Institute of Economic and Social Research (NIESR)\u00a0<\/span>said<\/span><\/a>\u00a0that January\u2019s smaller than expected fall in GDP means that it now estimates a contraction of 2.4% in the first quarter of 2021.\u00a0This would leave GDP in the first quarter of 2021 around 9% lower than its level in the last quarter of 2019, before the pandemic struck.\u00a0<\/span><\/p>\n

Real-time data and NIESR analysis imply that GDP is likely to resume its growth in February and March, by 0.3% and 1.1% respectively, on the back of higher contribution from Government services and improving consumer confidence as infection rates come down. As a result, the first quarter of 2021 is likely to see a smaller contraction than widely anticipated.\u00a0<\/span>However, the pace of recovery from the second quarter will crucially depend on how the opposing effects of the vaccine roll-out and lifting lockdown affect the path of Covid-19, as well as how consumers and businesses react.<\/span>\u00a0<\/span><\/p>\n

Bank of England governor Andrew Bailey\u00a0said<\/span><\/a>\u00a0that the\u00a0<\/span>UK economy should recover to its pre-pandemic size by the end of this year. Speaking in an interview with BBC Radio 4\u2019s Today Programme on Monday morning,\u00a0Mr Bailey said the Bank was \u2018not out of firepower\u2019 in defending the economy as it recovers from the pandemic, adding that it was looking at \u2018new tools\u2019 which could include negative interest rates. However, he warned that new variants of the virus could still pose a risk to the economic recovery. The Bank of England governor also remarked that the economic effects of the pandemic had been \u2018very unequal\u2019, with women, ethnic minorities and the low-paid all disproportionately impacted.\u00a0<\/span>\u00a0<\/span><\/p>\n

OBR committee member and former Bank of England deputy governor Sir Charlie Bean\u00a0said<\/span><\/a>\u00a0last week to the Commons Treasury Committee that he does \u2018not expect households to go out and blow [their savings] all within the next quarter or two\u2019 but it will be \u2018spread out over several years\u2019. According<\/a>\u00a0to a recent report by the Centre for Economics and Business Research, UK households will go on an estimated \u00a350bn spending spree once lockdown restrictions are lifted. It\u00a0warned<\/a>\u00a0that \u2018if interest rates are kept low, there is a real threat that inflation could rise rapidly above the Bank of England\u2019s 2% target and be difficult to control.\u2019\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

This week’s Covid Economy Summary covers the state of the economy after the reaction to ONS’s January numbers. <\/p>\n","protected":false},"author":441,"featured_media":134253,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[7383,7271,7341],"tags":[],"_links":{"self":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/posts\/134829"}],"collection":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/users\/441"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/comments?post=134829"}],"version-history":[{"count":2,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/posts\/134829\/revisions"}],"predecessor-version":[{"id":134831,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/posts\/134829\/revisions\/134831"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/media\/134253"}],"wp:attachment":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/media?parent=134829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/categories?post=134829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/tags?post=134829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}