Budget watchdog predicts UK Covid restrictions to last into autumn
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The UK’s budgetary watchdog is expecting Covid restrictions to last well past the government’s 21 June target date.
The Office for Budget Responsibility (OBR) said in its economic forecast today that it expected Covid curbs like travel restrictions, local lockdowns, limits on large gatherings and guidance on home working to continue into the autumn.
This is despite Boris Johnson’s roadmap out of the Covid lockdown targeting 21 June to lift all restrictions.
The lockdown roadmap is based on projections that all adults in the country will have been offered a Covid vaccine by July.
The government is planning on allowing 90,000 people to attend the final of the Euro football competition at Wembley Stadium in July, indicating that the Prime Minister expects large-scale events to return in the summer.
The OBR’s economic forecast – which predicts a 4 per cent growth in 2021 and 7.3 per cent next year – could end up under shooting 2021 growth predictions if all restrictions are lifted earlier than autumn.
The OBR said: “Our forecast is broadly consistent with the Government’s Roadmap, which envisages the progressive removal of public health curbs between early March and late June, though with some residual restrictions on activity which may include travel restrictions, local lockdowns, guidance on home working, continued test, trace and isolate activities, limits on large gatherings, mask wearing, and communications on hand washing and other hygiene practices.
“The accelerated rollout of vaccines means we assume that the majority of restrictions are removed earlier than we predicted in our November central forecast.”
The OBR’s forecast projected the UK’s GDP to return to pre-crisis levels by the middle of next year – six months earlier than previously expected – and that GDP growth next year will be the highest since 1941.
Unemployment is also expected to peak at 6.5 per cent instead of the 11.9 per cent expected last July.
“Today’s forecasts show that our response to coronavirus is working,” Rishi Sunak said.
“That means growth is faster, unemployment lower, wages higher, investment higher, household incomes higher.”