Australia markets closed
  • ALL ORDS

    7,578.60
    +39.50 (+0.52%)
     
  • ASX 200

    7,308.00
    +32.70 (+0.45%)
     
  • AUD/USD

    0.7596
    +0.0012 (+0.15%)
     
  • OIL

    73.08
    -0.22 (-0.30%)
     
  • GOLD

    1,783.70
    +7.00 (+0.39%)
     
  • BTC-AUD

    45,281.03
    +1,092.80 (+2.47%)
     
  • CMC Crypto 200

    823.91
    +37.29 (+4.74%)
     
  • AUD/EUR

    0.6358
    +0.0005 (+0.08%)
     
  • AUD/NZD

    1.0733
    -0.0006 (-0.05%)
     
  • NZX 50

    12,626.09
    +39.20 (+0.31%)
     
  • NASDAQ

    14,365.96
    +91.72 (+0.64%)
     
  • FTSE

    7,115.13
    +5.16 (+0.07%)
     
  • Dow Jones

    34,196.82
    +322.58 (+0.95%)
     
  • DAX

    15,549.95
    -39.28 (-0.25%)
     
  • Hang Seng

    29,288.22
    +405.76 (+1.40%)
     
  • NIKKEI 225

    29,066.18
    +190.95 (+0.66%)
     

Economists see surging growth as UK reopening boom gathers pace

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·Senior City Correspondent, Yahoo Finance UK
·2-min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Fast data shows economic activity has been rebounding rapidly since restrictions began to ease last month. Photo: Dave Rushen/SOPA Images/Sipa USA/PA
Fast data shows economic activity has been rebounding rapidly since restrictions began to ease last month. Photo: Dave Rushen/SOPA Images/Sipa USA/PA

Private sector economists have joined the Bank of England in predicting a historic year for growth.

Monthly private sector forecasts compiled by the Treasury show a big upgrade in forecasts for the UK economy. Analysts are now predicting the best year for growth since the aftermath of the Second World War.

The average of 23 forecasts made since the start of May shows economists are now predicting GDP growth of 6.5% in 2021, compared to a forecast of 5.7% made last month. It marks the third month in a row that expectations have been upgraded.

Read more: 'Good news' as Bank of England predicts bumper year for growth

The highest forecast comes from Goldman Sachs, which now expects the economy to expand by 8.1% this year. The lowest, from macro forecaster Heteronomics, is 4.9%.

The upgrade to the average private sector forecast comes weeks after the Bank of England said it expected the economy to surge by 7.25% this year. The chief executive of Barclays has said the UK is on track for its strongest annual growth since 1948.

The bullish forecasts come as early signs point to a rapid rebound for the economy as restrictions are eased. Non-essential retail and other parts of the economy such as gyms and nail salons were allowed to open from the middle of last month. Restaurants, bars, cinemas, and theatres were allowed to reopen indoors from this week.

Read more: Barclays says UK set for best year since 1948 as profits surge

"High-frequency data point to a marked pickup in credit card spending. Mobility levels are up. Use of public transport is also up. And dining reservations have picked up nicely since the opening of outdoor dining," Sanjay Raja, Deutsche Bank's chief UK economist, wrote in a note this week.

"While we still remain some way away from normal, most signs point to an acceleration back to normal."

Despite the historic growth forecasts, the Bank of England has said it expected the UK economy to only be back at pre-pandemic levels by the end of this year. The UK economy suffered one of the steepest GDP collapses of any major economy last year, slumping 9.8% as a result of the COVID-19 pandemic.

Watch: What is a V-shaped recovery?

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting