International Finance

UK economy to grow by 6.5% in 2021 before slowing slightly in 2022: OBR

UK economy-IFM (1)-image

The UK economy is set to grow by 6.5 percent in 2021 and subsequently slow down in 2022 as well as 2023, according to a fresh report by the Office for Budget Responsibility (OBR). The economy is forecasted to grow by 2.1 percent in 2022 and 1.3 percent in 2023.

In its previous forecast, the OBR predicted that the UK economy will grow by 7.3 percent in 2021 and by 1.7 percent and 1.6 percent in 2022 and 2023 respectively.

The OBR has further said that the UK economy will return to its pre-Covid level at the “turn of the year”, around six months earlier than predicted in March, as it delivered a raft of economic upgrades.

UK finance minister Rishi Sunak revealed the same as he began a budget speech. He said, “Today’s budget does not draw a line under Covid-19. We have challenging months ahead. But today’s budget does begin the work of preparing for a new economy post-Covid-19.”

The impact of Brexit on the UK economy could be more severe than that caused by the pandemic, according to OBR chairman Richard Hughes. He told BBC, “In the long term it is the case that Brexit has a bigger impact than the pandemic.”

According to Hughes, Brexit could potentially reduce UK’s long-run GDP by around 4 percent, whereas, the effect of the pandemic will reduce that (GDP) output by a further 2 percent.

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