According to Chancellor Rishi Sunak, a wave of cash-rich companies will accelerate the recovery
Cash-rich businesses and consumers will spark a wave of spending to fuel Britain’s recovery from the pandemic, the Chancellor said.
With analysts suggesting the UK is heading for its strongest year of economic growth since World War II, Rishi Sunak pointed out that UK companies’ bank accounts have £ 100 billion waiting to be invested.
It came when the Bank of England figures showed households had saved an additional £ 16.2 billion in March, bringing the total of squirrels straying during the pandemic to £ 203 billion. The bank also said mortgage lending hit a record high of £ 11.8 billion in March.
Purchasing power: Chancellor Rishi Sunak pointed out that there is £ 100 billion waiting in the bank accounts of British companies to be invested
In another boost, IHS Markit research group said their activity index in the UK manufacturing sector hit 60.9 in April – its best performance in 27 years.
Speaking at the Wall Street Journal CEO’s summit, Sunak said, “As we look forward to reopening in the coming weeks and months, there are signs that we are cautiously optimistic and we can tell from the data. I am confident that this will continue to be the case for the rest of the year.
“We’re seeing consumer confidence back to pre-pandemic levels. We know there is a tremendous amount of excess savings. We tried to set things up to unlock some of that money. The signs are promising. “
Bank of England chief economist Andy Haldane said the economy will rebound like a “coil spring” as some of that money will be spent on “accidental savers” after the restrictions are lifted.
The analysts at Goldman Sachs assume that the British economy will grow by 7.8 percent this year after the slump of almost 10 percent last year.