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British Economic recovery Despite the threat of shortage of personnel, it will accelerate into the fall Higher inflation, According to the forecast of the business lobby group CBI.
The CBI stated that as the successful vaccination plan allows continued relaxation of the lockdown next month, which will drive consumer spending and business activities to surge in the second half of 2021, the economy will grow by 8.2% this year and 6.1% next year.
It added that the growth rate will exceed all major competitors in the UK, allowing the economy to return to pre-pandemic activity levels by the end of the year, although the rebound will be the head of any country after one of the worst contractions during a recession. Months.
CBI said that a large number of job vacancies and some shortages of raw materials and components (especially computer chips) may last for several months, hitting certain industries, but may only be temporary.
last month Bank of England raises estimates British national income or GDP growth will increase from 5% to 7.25% in 2022-this is the fastest growth rate since World War II.
next week, Central bank decision makers meeting Set the interest rate level. Although they will not modify the quarterly forecast, they may indicate that the rebound last year was stronger than previously estimated.
GDP growth accelerated to 2.3% in April Beginning in March, this was the fastest month-on-month growth since July last year.
New York City economists have been revising their forecasts in recent weeks. Some have pushed their forecasts up to 8% this year, citing a sharp drop in the unemployment rate and fewer workers on leave.
The Office for National Statistics said this week that the proportion of British workers reportedly taking leave has fallen from about 20% in late January 2021 to 7% in late May 2021. Approximately 2 million workers are now on vacation, which is the lowest number since the start of the program.
However, the growth rate of business investment may be slower than consumer spending, 5% below the pre-pandemic peak.
Former central bank governor Mervyn King Some people believe that the surge in spending may trigger out-of-control inflation and force the Bank of England to raise interest rates significantly.
Wage growth is now increasing at a rate of 3%. If the inflation rate rises to more than 3%, it means that the living standards of British workers will decline and may reverse the current increase in spending.
CBI Director-General Tony Danker said: “The economic recovery this year and next is indeed showing positive signs. The data clearly shows that there are pent-up demand and ambitions in many industries.
However, Alpesh Paleja, CBI’s chief economist, warned that “this will not feel like a recovery for some people.” The aviation and event industries have not yet fully restarted and it will take longer to make up for the losses.
“Other long-term challenges are also emerging: recruitment difficulties have exacerbated global supply bottlenecks, which in turn has increased pricing pressure,” Paleja said. “Although these should fade with the normalization of activities around the world, they deserve close attention.”
Paleja said that the combined effects of increased consumer spending and shortages of certain commodities may push up inflation later this year, but he expects any spikes to be temporary and then fall back to 2% next year.
Finance Minister Jesse Norman said that as the economy recovers from the coronavirus crisis, “inflation is likely to pose a serious risk”.
He told BBC Radio 4’s Today program: “I’ll hesitate to disagree [Lord King], Who is a great expert in these fields, but it is true, it is difficult to judge according to our current special circumstances.
“As the economy rebounds, especially in the face of social distancing and other restrictions, different markets and different companies may find different price points, so you may experience temporary inflationary pressures.
“I think inflation may become a serious risk-this is why we have implemented economic policies and independent economic policies in this country for more than 20 years. Bank of England It is so that we can monitor and manage inflation risks. “
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