The economic outlook in Britain is improving faster than in Europe thanks to the rapid rollout of Covid vaccines, a watchdog said.
In its latest health check on the world’s major economies, the Organisation for Economic Cooperation and Development (OECD) raised its growth forecast for the UK in 2021 from 4.2 per cent to 5.1 per cent.
The 0.9 percentage point increase was far bigger than the 0.3 percentage point rise in the eurozone, which is expected to grow by 3.9 per cent this year.
In its latest check on the world’s major economies, the Organisation for Economic Cooperation and Development raised its growth forecast for the UK in 2021 from 4.2 per cent to 5.1 per cent
But the biggest upgrade was reserved for the United States where President Biden’s £1.4trillion stimulus package is set to turbocharge the recovery.
More than one in three adults in the UK have received a Covid vaccine compared with around one in ten in the European Union.
Noting the ‘slower’ rollout on the Continent and the impact on the economy, the OECD said the ‘acceleration of vaccine deployment should help momentum to build particularly in the UK’.
The report said ‘global economic prospects have improved markedly in recent months’.
It raised its global growth forecasts for 2021 from 4.2 per cent to 5.6 per cent and said it expects the US to grow by 6.5 per cent this year – far stronger than the 3.2 per cent in predicted in December.
President Biden’s £1.4 trillion ‘American Rescue Plan’ – a huge stimulus package worth 8.5 per cent of national income – would turbocharge the US economy, the report said.
It added that the extra spending in the US would provide ‘welcome spill overs for activity in major trading partners’ including Britain where it would raise output by 0.6 per cent ‘in the first full year of the package’.
Biden’s plan is expected to boost the US economy by 3.8 per cent and output worldwide by 1.1 per cent, with neighbouring nations Canada and Mexico the biggest beneficiaries.
‘Vaccine deployment is finally gaining momentum and government fiscal stimulus – particularly in the US – is likely to provide a major boost to economic activity,’ the report said.
The report called for vaccinations to be ramped up around the world to ensure the global economy recovers.
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