Coronavirus: UK economy ‘might not recover until 2024’

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The UK economy could take until 2024 to return to the size it had been before the coronavirus lockdown, according to analysis from the EY Item Club.

The forecasters, who use a uniform economic model to the Treasury, suggest unemployment will rise to 9% from 3.9%.

According to them, the economy will shrink by 11.5% this year, worse than the 8% they predicted only a month ago.

Consumers are more cautious than expected, they said, while low business investment will dampen growth.

As a result, they now expect the post-coronavirus economic recovery to need 18 months longer than previously forecast.

However, the Item Club says it’s youth and useful data has only recently been made available.

“Unsurprisingly, without hard data, an honest range of views on the performance and outlook for the UK economy emerged,” said Mark Gregory, UK chief economist at EY.

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Last week, the Bank of England’s chief economist Andy Haldane told MPs the UK economy had “clawed back” about half the autumn in the output it saw during the peak of the coronavirus lockdown in March and April.

There had been a V-shaped “bounceback”, he said, concerning the shape that indicates a rapid economic recovery.

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