Responding to the latest official GDP figures, showing the economy shrunk by 1.5% in Q1 2021, Tej Parikh, Chief Economist at the Institute of Directors, said:
"The UK economy is on course for a bumper bounce back this year.
“The first quarter should mark the low point for the economy in 2021. The lockdown and added costs of navigating new trading terms with the EU limited many businesses' trading activities at the start of the year. Meanwhile, the vaccine rollout, extension of support measures at the Budget, and the roadmap to reopen the economy has helped build directors' confidence for the months ahead.
"As restrictions wind-down further, many firms will increasingly look to re-scale by taking on new hires and making investments, which will support growth. But the lion's share of the UK's rapid recovery in the coming quarters will be led by consumers, with pent-up demand likely to drive retail, leisure, and hospitality spending. If the virus is kept at bay, we could see the economy shoot back to pre-pandemic levels by the close of the year.
"As we near the end of the Government's current roadmap, it is vital that directors have clarity on what to expect after June. The debt hangover from last year will be biting many firms, so advanced guidance on the nature of restrictions going forward is vital to support their continued planning."