Britain’s strong economic rebound is taking economists by surprise as it moves into high gear.
After months of severe economic stagnation and a record fall in GDP, the UK economy is looking rosier according to Bank of England economist Andy Haldane.
Sharing his view on Tuesday regarding the current economic climate, Haldane said that Britain’s recovery, was coming “sooner and faster” than was expected.
This coincides with strong economic data from Europe including France, which is seeing a stronger than anticipated economic rebound.
Britain’s V-shaped recovery, long thought overly optimistic just 2 months ago, is looking more like reality despite large job losses in retail, manufacturing, tourism and the airline industry.
With consumer spending slowly returning to seasonal averages, British households are eager to get back to normality having held off on purchases from buying new clothes to booking holidays.
While signs of a V-shaped recovery could support a jobs recovery in the final quarter of 2020, there are considerable hurdles to overcome as the furlough scheme unwinds in August, and companies have to make tough decisions on hiring and forecasting future demand.
The risk of unemployment levels climbing to 10% or above also remain a real possibility – however this could be a short term spike with a much faster recovery than in 2008 – if businesses and consumers can get back to normality.