Official forecasts predict that economic recovery from the Covid induced slump could take longer if the UK fails to secure a Brexit deal.
As Brexit talks finalise concerns have been raised that “failure to avoid a disorderly end to the Brexit transition period” could lengthen the country`s recovery. Foreign secretary Dominic Raab stated that it was “unlikely” Brexit negotiations would be extended beyond Sunday.
The Office of National Statistics (ONS) say the country`s economy is still very far from pre-coronavirus output levels with just a 0.4 per cent increase in the month of October. The first lockdown to curb the spread of the coronavirus pandemic caused a record slump at the beginning of the year and economic recovery continued to slow.
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Despite all efforts made to improve the economy while controlling the spread of the virus, the UK economy “still remains around 8 per cent below its pre-pandemic peak”.
Jonathan Athow, ONS deputy national statistician said:”Public services output increased, while car manufacturing continued to recover and retail again grew strongly”. However, the reintroduction of some restrictions saw services growth hit, with large falls in hospitality, meaning the economy overall grew only modestly.”
The authorisation of the Pfizer/BioNTech vaccine offers real hope but “further lockdown restrictions before mass vaccine rollout is achieved” would cripple economic recovery and if the Brexit transition period does not end well this would be a further set back to the UK`s recovery.
Yael Selfin, chief economist at KPMG UK, said:”GDP could rise by 6.1% next year in the event we get a Brexit deal, while growth could prove lower at 3.3% if there is no deal with a small recession at the start of the year.”
