UK’s Post-Covid Recovery Will be Slower Than in Peer Countries Economists Warn
If the survey on almost 100 economists conducted by the Financial Times is anything to go by, then it may not be until 2023 that we see the UK economy go back to the pre-corona level.
The UK was the first country in the world to approve and administer the Pfizer vaccine to the public and at the time of writing this, two more vaccines from Oxford and Moderna have been approved in the country.
The country is set on quickly rejuvenating its economy and the expectation is that swift and widespread vaccination of citizens will make them more comfortable to resume work and consequently inspire a consumer-led resurgence.
About 80% of the UK’s economy depends on the service sector which was the most hit by the pandemic.
2 million people have already received their first dose of the vaccine and the country looks on course to immunise its most vulnerable population by mid February.
So, why all the pessimism from the economic experts?
Reasons the UK’s economic resurgence will be slower than in the USA and other EU nations
New coronavirus variant
Since a new Covid-19 strain was discovered in the UK, more than 40 countries have banned UK arrivals, a big blow to the travel sector that had began resurrecting. And now, should the variant prove to be tougher than current vaccines, then it could trigger another lockdown.
Even before Covid 19 hit the world economy, the UK was already suffering the consequences of Brexit.
Covid-19 saw the pound drop to its lowest level against the dollar in 35 years but the damage had already happened in 2016 when the Brexit vote made the sterling drop to a 31-year low on the currency markets.
Unlike its peers, the UK is recovering from two significant hits to its economy.
The fact that Brexit was a soft divorce is reason to be optimistic but it will still have its effect on the economy especially on the travel and trade sectors.
The UK government’s slow implementation of Covid-19 regulations
The government’s response to Covid 19 is not what you would call swift. This coupled with the citizen’s blatant disregard of the set directives means that the UK took a bigger hit than it should have.
Now, even if the UK experiences faster economic growth than the US and other EU nations, its GDP level will be lower than them because the country is recovering from a deeper economic hole.
While the above represents the thoughts of a majority of economists, some also believe the UK could emerge on top of the US and fellow European nations.
These experts are putting their trust on government measures set up to support economic recovery like the decision to vaccinate as many people as possible rather than follow the existing strategy of giving a first and second dose to a chosen group of people.
They also argue that while the implications of Brexit are undeniable, it allows the UK to negotiate new trade deals with other economies such as Japan, China, and the US.