In the midst of the pandemic, the economic concerns have held many countries back from taking stringent measures. Nations all over the world have suffered setbacks in all the sectors and the economies have become fragile.
On 11th May, the Queen of England announced plans to continue to create jobs, support businesses and improve regulations on the same. She said that the UK Government planned to strengthen the economic ties between across the union and intended to improve the infrastructure. Public finances and a secure path to economic recovery was highlighted in her speech. She spoke of efforts being made to reduce poverty and alleviate human sufferings in detail.
Recently, many optimists from many consultancy firms announced that British economy is expected to grow at the highest rate since the Second World War. This comes as a surprise and even as a hope for many and there are many speculations about the future.
Goldman Sachs, a leading global investment banking group stated that Britain will make a very fast come back after the slump in the year 2020 due to its speedy vaccination programme. The fast process of inoculation has brought down the numbers and the country is preparing to open up completely. The Guardian reported that the EY Item Club expected a rise of 6.8% in the GDP of the country. The economy had shrunk by 9.8% in 2020. The British Government has been involved in aiding and funding many small investors as well as start-ups to survive the pandemic.
Innovative measures doing the trick
Rishi Sunak, the British Chancellor of the Exchequer announced on 4th May that a meeting between the Finance Ministers from across the G7 countries (UK, Canada, France, Germany, Italy, Japan and United States) will be held in June in Cornwall. This G7 Finance Track aims to discuss international economic priorities and the process will involved the European Commission, Eurogroup, World Bank, IMF and OECD. This first in-person meeting will work towards a sustainable economic path ahead keeping in mind the ecological benefits too.
Experts believe that while the lockdown did impact the economy, the businesses as well as consumers seemed innovative solutions and that resulted in less damages. The UK GDP expanded by 0.4% in February and much more is expected once the non-essential shops and hospitality sectors open up. UK has had a phased opening up of sectors and due to the fall in the number of infected cases, is all set to ease down the restrictions completely. The travel industry too has resorted to unconventional means to come out of the sag by using travel passports and agreements signed with many countries.
The Government has been resorting to schemes to support the trade and investment hubs, start-ups, tax cutes for manufacturing companies, increased National Living Wage, enhancing Fin-tech expertise in innovative sectors, extension of the Furlough scheme to support those who lost their jobs, the Breathing space scheme to help those dealing with mental health, flexible apprenticeships, immense support for SMEs and so on. The idea is to strike a balance between supporting the unemployed and helping the economy sustain. There are customised government funding plans for devolved administrations like those in Scotland, Wales and Northern Ireland. Chancellor Sunak displayed inclination towards an environment friendly growth by highlighting the country’s belief in green industrial revolution and the objectives of creating around 2 million green jobs by 2030. The Furlough scheme according to him, supported 11 million people in the past and he spoke of continuing the effort.
As the country recovers from the huge impact of the COVID 19 and the consequent impact on the economy, there are still many uncertainties. With the complications of the Brexit, the nuances of many deals will take time to unravel. The additional fear of another wave of COVID 19 still has some fear amongst the people. The National Institute of Economic and Social Research,UK warned against a GBP 700 billion output loss due to the combined reasons of COVID 19 and Brexit.The Government has been announcing ambitious schemes and instilling a sense of confidence among the people. But the health warnings continue to cloud all the gatherings, initiatives and measures. There is time before one gets to know the verdict but the optimism is much welcome.