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Economy

UK economy set to return to pre-pandemic level by year’s-end: BoE

Published: Updated:

Britain’s economic activity will return to its pre-coronavirus level at the end of this year following the country’s vaccine rollout, Bank of England governor Andrew Bailey forecast on Monday.

The earlier-than-expected recovery - the BoE’s expectation had been for early 2022 - comes ahead of the central bank’s latest interest rate decision on Thursday.

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“This COVID effect on the economy is huge,” Bailey said in a BBC interview.

“What we are saying with the recovery is that the economy will actually get back in terms of activity to around the end of this year, to where it was at the end of 2019.

“That’s good news. But let’s be realistic - it’s not more than getting back to where we were pre-COVID,” Bailey added.

He heaped praise on the British government’s rapid vaccination drive that has injected around 24 million Britons with their first jab.

“I’m now more positive (on the outlook) but with a large dose of caution,” Bailey said.

He said the vaccine program has been a “great achievement” and that while the lockdown has been painful, “we are seeing the retreat of COVID”.

The pandemic sparked a 10-percent slump of UK economic output last year -- the worst annual performance in more than three centuries.

Bailey added Monday that the economy had displayed more resilience during the government’s current third lockdown compared with the initial virus shutdown in the first half of 2020.

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