Time to plan for post-pandemic recovery and longer term
We are not out of the woods, but with EY ITEM Club forecasting further growth of 5% in UK GDP in 2022, businesses can start to plan for the possibility of two years of strong economic performance, with a very favourable tax regime to support capital investment. Once the return to more normal operations is achieved in the coming months, it will be important to take the time to understand how the new landscape is settling to shape longer-term strategies.
A staged approach makes sense as risks remain, both related to the pandemic through future outbreaks, and in areas that have been of concern for some time, including the impact of Brexit and increased geopolitical tensions. Although EY ITEM Club believes the recovery can be accommodated without any inflationary spike, there is more discussion of the risk of rising prices than for some time, and it would be wise to keep a close eye on input prices.
As we have noted before, we will remain in a policy-driven economy for some time with ‘levelling up’, the move to net zero and the drive to build Global Britain as the priorities. Understanding how these initiatives might impact the economy and what the opportunities arising could be, will remain important for the foreseeable future.