Careful Balancing Act Needed To Keep Inflation At Bay

AFTER the 16 months we’ve all endured, it’s easy to fall into a cycle of gloom. Sometimes it seems as if the pandemic will never end, and that’s without even considering the terrible impact on NHS waiting lists and the collapse of the economy, which contracted by an astonishing 9.8 per cent in 2020 – worse than any other G7 country.

- Stephen Pollard

But two sets of figures make a very different point, and should help us to remember that we are certainly not doomed forever, or even the near future.

First are those very encouraging statistics for infections, which have shown an unexpected but nonetheless steady fall – although we don’t yet know whether this is just a blip or whether we really are past the peak of this third wave.

But the second bit of good news seems more certain. According to a prediction from the respected forecasters the EY Item Club, the economy is set to surge by 7.6 per cent this year – the fastest growth rate since 1941. That’s much faster than previous predictions and means we will be back at pre-pandemic levels by December. Last year the same forecasters said it would take until 2024 for us to make a full recovery, so it is encouraging news.

IN PART because of the vaccine rollout, consumer spending has shot back in recent months. The forecasters say the reopening of shops, bars and restaurants is driving us to go out and spend some of the £200billion that we saved during the pandemic.