John Redwood predicts a 'bounce back' for the UK economy
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Andrew Neil, whose GB News will launch later this month, has taken to Twitter to criticise the OECD’s most recent economic forecast. Though the latest projections are more promising for the UK, the Scottish journalist notes the forecast is in stark contrast to one it gave earlier this year.
Mr Neil wrote on Twitter: “Only a few months ago OECD was predicting UK would have slowest recovery of major economies.
“@Now it says we’ll be one of fastest. But ‘scarred’.
“Molly the Dog makes more reliable forecasts.
The journalist was responding to the OECD’s six-monthly Economic Outlook, which was published on Monday.
The comprehensive assessment of the state of the global economy saw the UK’s economy growth significantly upgraded.
The OECD forecasts that UK GDP will rise by 7.2 percent in 2021, the fastest growth since 1941.
Such a sharp rise, after a grim 9.8 percent contraction in 2020, would outpace other advanced economies, including the US.
They also forecast a rise of 5.5 percent in 2022.
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The latest projections for the UK mark a change from its earlier forecast, where the Paris-based thinktank predicted a 5.1 percent growth this year.
The OECD also upgraded its forecast for 2022, with growth expected to rise 5.5 percent, up from its earlier estimate of 4.7 percent.
The upgraded projections, which were mirrored across many major economies, reflected the UK’s rapid vaccine dispersal, the OECD said.
However, the thinktank warned the pandemic’s long-term economic impact will hit the UK particularly hard.
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The OECD said the UK could suffer more longer-term economic damage, known as “scarring”, than other G7 nations as the impact of the pandemic is compounded by Brexit.
To workout the long-term forecasts, the thinktank examined how much potential output has been lost because of pandemic, by comparing the latest projections for national income levels in 2025 with pre-pandemic forecasts.
It found major eurozone members could see a 0.3 percent annual decline in potential economic output, while the UK’s growth rate could be down 0.5 percent a year.
The report said: “The United Kingdom could suffer the biggest reduction among G7 countries (a decline of 0.5 percentage point per annum), in part reflecting the additional adverse supply-side effects from 2021 following Brexit.”
They added: “Trade contracted in early 2021 as a consequence of leaving the EU single market and containment measures, but will recover slowly.”
The forecasters found that Japan, Canada and the US will only suffer limited scarring.
It said the US economy is expected to be larger than previously forecast, due to massive government stimulus.
Mr Neil often refers to his eight-year-old golden retriever as “Molly the Dog” on social media.
The well-behaved dog made regular appearances with his owner when the journalist hosted BBC1 show, The Week.
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