Britain’s pandemic-hit economy is expected to rebound by 6.5 percent this year before slowing slightly in 2022, finance minister Rishi Sunak announced Wednesday in his budget statement.
The 2021 forecast was much stronger than the 4.0-percent growth predicted in March but Sunak added that the pace would slow to 6.0 percent next year.
Sunak said the UK economy was on course to return to its pre-pandemic level at the turn of the year, while recognising that “people are concerned about global inflation” which is rising at a fast pace as economies reopen after lockdowns.
Sunak said the UK annual inflation rate was forecast to climb to an average of 4.0 percent over the next year from 3.1 percent currently, with price rises fuelled by soaring energy costs and supply constraints.
Britain’s growth expectation this year meanwhile compares favourably with Europe’s biggest economy Germany, which Wednesday forecast GDP expansion of around 2.6 percent in 2021.
Germany’s slower-than-expected rebound from a pandemic-induced slump last year was largely owing to bottlenecks in global supply chains, its government said.