Sunny growth forecasts reflect 'underlying optimism ' - Chamber

Bank of England's sunny forecasts of major growth in the UK economy reflects “underlying optimism ” that consumer spending levels will rocket as Covid restrictions ease, business leaders have said today.

Figures released today speculate that the economy will expand by 7.25 per cent this year, the fastest growth in more than 70 years. Growth follows harsh contraction of the UK economy by 9.9 per cent on 2020, due to the pandemic.

The Bank of England has said that it expects recovery to pick up as the reopening of high streets will boost consumer spending levels.

The Monetary Policy Committee has also voted to hold interest rates at a record low 0.1 per cent.

Raj Kandola (pictured), head of policy at Greater Birmingham Chambers of Commerce, commented: "Earlier this year the Bank of England's Chief Economist compared to the UK economy to a coiled spring and this forecast seems to reflect that underlying optimism as consumer spending levels look set to rocket as national restrictions ease and the vaccine rollout continues at the current pace.

"The latest forecasts also seem to imply that interest rates will stay at a similar level at quite some time, however, we also need to be wary of how businesses will respond once government support measures such as the Job Retention Scheme come to an end later this year.

"As we set out in our latest report, Keep Business Moving II, we shouldn't forget that a number of industries - such as live events and aviation- are still facing incredible hardship and are likely to continue to do so over the coming months.

"That's why its vital the Government doubles down and offers the financial support these sectors desperately need in order to protect thousands of jobs and livelihoods across the region."