The UK economy may not recover from its Covid-19 contraction until late 2024, influential forecasters say.
The EY Item Club, which uses the Treasury’s model of the economy, has added 18 months to its forecast of a recovery to pre-Covid levels. Despite retail sales back to regular levels, the forecasters now predict an 11.5% drop in gross domestic product this year, rather than 8%. “Even though lockdown restrictions are easing, consumer caution has been much more pronounced than expected,” said Howard Archer, the club’s chief economic adviser.
The bleak outlook comes ahead of April-June GDP figures for America and the eurozone, which will show a second successive quarterly contraction.
Economists at Royal Bank of Canada have forecast the eurozone’s largest-ever contraction, of perhaps 11% or