Huge fiscal support announced in Budget 2021 to aid the UK economy to grow in 2021, says GlobalData

Following today’s unveiling of the UK’s Budget 2021 as the country sets out its long-term economic recovery;

Gargi Rao, Economic Research Analyst at GlobalData, a leading data and analytics company, offers her view:

“The £325bn ($453.8bn) COVID-19 package and successful vaccination drive will set the UK to experience a strong V-shaped recovery for 2021. According to GlobalData, the country’s growth rate is expected to increase to 4.75% in 2021, a huge step up from the -10.9% seen in 2020. This is supported by the tactful job-oriented policies, grants for the self-employed and universal credit uplift program for the most vulnerable.

“The budget clearly lays out an economic plan to reduce the pace of increment in debt levels over the medium term, create job opportunities and boost production through more capital formation.”

Here are some of GlobalData’s thoughts on the announcement:

  • “The announcement of freeports will encourage investments and more capital creation, as well as put the economy on a sustainable growth path through a boost in the external sector.”
  • “The extension of the furlough scheme until September 2021, the business rate holiday until June, and the 5% reduction in VAT for a further six months should be effective in reviving consumer sentiment.”
  • “GlobalData forecasts household consumption expenditure to grow by 6.3% in 2021 following a contraction of 8.6% the previous year.”
  • “Increasing corporate tax to 25% by 2023, which is still the lowest in the G7, is expected to help plug the widening fiscal gap.”

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