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Office for Budget Responsibility now sees ‘faster recovery’ says Rishi Sunak

The Office for Budget Responsibility sees a ‘swifter and more sustained recovery’ than it expected in November

Ben Chu
Economics Editor
Thursday 04 March 2021 21:37 GMT
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(PRU/AFP via Getty Images)

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The Office for Budget Responsibility (OBR) sees a “swifter and more sustained recovery” than it expected in November, Chancellor Rishi Sunak said in his 2021 Budget speech.

Mr Sunak said the OBR, the Treasury’s independent forecaster, is now projecting UK GDP to be back to its pre-crisis peak by the middle of 2022 , six months earlier than it previously expected.

He added that the OBR now thinks that unemployment will peak at 6.5 per cent, down from the 11.9 per cent it projected in its central scenario last summer.

However, Mr Sunak also said that the OBR continues to project a 3 per cent of shortfall in UK GDP relative to its pre-crisis forecasts in five years’ time.

In its official report, published alongside the Budget, the OBR said: “The rapid rollout of effective vaccines offers hope of a swifter and more sustained economic recovery, albeit from a more challenging point than we forecast in November.”

“The pandemic is nevertheless still expected to lower the supply capacity of the economy in the medium term by around 3 per cent relative to pre-virus expectations.”

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