UK economy will grow faster than the EU in 2021 and 2022, says leading economic organisation the OECD as it issues a stark global warning on threat posed by the Omicron Covid variant
- UK set to enjoy fastest economic growth of world's seven most advanced nations
- OECD has forecast UK economy will also grow faster than EU's in 2021 and 2022
- But organisation has also issued a global warning on threat posed by Omicron
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| The numbers mean the UK is expected to enjoy the fastest economic growth of any of the world's seven most advanced economies |
The UK economy is set to grow at a faster rate than the EU's over the next two years, a major international organisation has forecast.
The Organisation for Economic Co-operation and Development (OECD) has predicted the UK economy will grow by 6.9 per cent in 2021 and then 4.7 per cent in 2022.
That is higher than the 5.2 per cent in 2021 and 4.3 per cent in 2022 which has been forecast for the Eurozone.
The numbers also mean the UK is expected to enjoy the fastest growth of any of the world's seven most advanced economies.
Boris Johnson and Rishi Sunak are likely to welcome the strong numbers as Britain continues its recovery from the Covid crisis.
But the OECD has also issued a stark global warning on the threat posed to the worldwide economy by the new Omicron coronavirus variant.
The OECD's predictions suggest the UK economy is on course to outpace its G7 rivals both this year and next year.
The 2021 forecast marks an upgrade from the 6.7 per cent predicted in September, and, while the 2022 outlook is downgraded from the 5.2 per cent previously pencilled in, it would still see the UK lead the G7 pack.
However, the OECD has warned that Britain could suffer a setback if supply and worker shortages do not ease.
The OECD's chief economist, Laurence Boone, today warned the emergence of the Omicron variant could jeopardise the global economic recovery.
Presenting the OECD's latest report, she said: 'We are concerned that the new variant of the virus, the Omicron strain, is further adding to the already high levels of uncertainty and risks, and that could be a threat to the recovery.'
The OECD lowered its global growth outlook in 2021 to 5.6 per cent from 5.7 per cent and kept it unchanged at 4.5 per cent for 2022 - although the report was compiled before the variant emerged.
The Paris-based group cited key risks to both the UK and global economy from surging inflation, supply chain bottlenecks and interest rate increases.
On the UK, it said: 'A prolonged period of acute supply and labour shortages could slow down the recovery by forcing firms into a more permanent reduction in their operating capacity.'
It added that household and business spending could be hampered by bigger-than-expected price increases for goods and energy, while inflation worries could lead to an early rise in rates.
'A worsening trade relationship with the European Union could also weigh on the economic outlook in the medium term,' it added.
But it said there could be a boost to the UK outlook if workers fill vacancies at a faster pace following the end of the furlough support scheme, helping ease some of the labour shortages.
The OECD said it is 'cautiously optimistic' over the global picture, though it said 'striking imbalances' have emerged.
Ms Boone said: 'Governments acted swiftly and effectively during the height of the crisis to support people and businesses. But the job is not finished.
'The lack of global co-ordination on vaccine deployment is putting all of us at risk.'
She added: 'The harshest scenario is that pockets of low vaccination end up as breeding grounds for deadlier strains of the virus, which go on to damage lives and livelihoods.'
