DAVY VIEW

Our new forecast for the UK economy is for a strong bounce back led by the consumer, with 6.7% GDP growth in 2021 and 5.7% in 2022, helped by the fiscal stimulus in March’s Budget. This rebound in demand will add to price pressures, with CPI inflation expected to peak at 3% at end-2021. This morning’s retail sales data, showing a massive 9% rebound in April, underline our view that household spending will drive a strong UK recovery.