The overall scale of the UK economy will not reach pre-coronavirus levels until the early months of 2023, according to forecasting from financial experts.
Current estimates from a Big 4 Accountancy Firm are that the economy will have shrunk by around 10.3 per cent over the course of 2020 and not fully returned to pre-Covid levels until more than two years later.
The coronavirus crisis has had a huge impact on economies worldwide, with the UK proving no exception and future growth very much dependent on how the public health battles within the pandemic play out.
The forecasting states that a second wave of Covid-19 and the need for a return to strict lockdown conditions could see the UK’s headline GDP figure for 2020 fall by as much as 12.6 per cent.
However, hopes are that the economy will grow by as much as 8.4 per cent in 2021, if vaccines for the coronavirus can be made widely available and prove effective in subduing the crisis that has been so devastating in recent quarters.
Although experts suggest there is a “high chance that the pandemic will be overcome by mid-2021”, they warn of some stern challenges still to come as far as employers and the wider economy are concerned.
Job losses are set to be a widespread occurrence in many parts of the economy in the coming months as the government tapers off its Job Retention Scheme, which had been covering the wages of millions of people on furlough in recent months.
Estimates are that unemployment across the country could rise to roughly 9 per cent during the final quarter of 2020.
“While it feels like the worst of the Covid-induced economic crisis is behind us, there are still many challenges,” commented Yael Selfin, researcher and economist.
“There could be a second wave of infection this year, although we expect any future lockdown to be less severe – and the timing and speed of the economic recovery will be impacted both by vaccine developments and Brexit outcomes,” she added.
Ms Selfin went on to emphasise the idea that the virus crisis presents opportunities for aspects of the UK economy and employers to become more productive and better equipped to compete in a post-Covid future.
“The government has an important role to play. Not just in continuing to provide short-term support to the economy but in readying the UK for a more productive future,” she said. “If we get this right, we could come out of this crisis with a better economy.”