The Bank of England is likely to upgrade its GDP growth forecast for the UK to 7 per cent next week amid signs that the economy is recovering far more rapidly than expected.
Weekly real-time data that Jefferies is tracking shows that economic activity is back at levels last seen when the pandemic started, even surpassing last summer after the economy reopened. More people are using public transport and are on the roads than at any point in the past 13 months. Hiring activity has also picked up.
The Bank of England will update its forecasts next week. When they were last published in February, the Bank expected growth of 5 per cent this year, but David Owen, chief European economist at Jefferies, said “a number of 7 per cent or more seems much more likely” now. That would be the strongest growth rate since 1941.
He added that 7 per cent was likely “even if the autumn brings with it the imposition of some additional restrictions” because the economy shrank much less than expected in the first quarter.
Jefferies real-time activity data suggested that the economy grew…