The latest CBI Economic Forecast predicts the UK economy is set for a breakthrough year despite COVID.
The CBI believes that UK GDP is set to bounce back to its pre-COVID level towards the end of 2021, a year earlier than the previous CBI forecast (in December 2020) expected.
The CBI is forecasting GDP growth of 8.2% this year and 6.1% in 2022 (revised up from 6.0% and 5.2% in its previous forecast), following a historically large -9.9% fall in output over 2020.
ONS: GDP up record 15.5% in Q3
The CBI now also expects a much lower peak in the unemployment rate (5.5% in Q3) than in December (7.3% in Q2 2021). This is in part due to the extension of the Job Retention Scheme into the Autumn, the resilience of the labour market so far, and expectations of a stronger economic recovery.
CBI director-general, Tony Danker, said: “There are really positive signs about the economic recovery ahead this year and next.
“The data clearly indicates that there is pent up demand and ambition across many sectors.
“Clearly this does not apply to the hardest hit sectors from the pandemic which even now face continued delays and genuine challenges to stay viable.
“Extending the commercial rent moratorium will help keep some firms’ heads above water, but the government must also do the same on business rates relief.
“It would be devastating for hospitality, events or aviation businesses to fail on what we hope is the last leg of restrictions.”