UK | Activity continues to firm ahead of the big reopening

With the government confirming that non-essential retailers and outdoor hospitality will reopen in England on Monday, our forecast of a strong rebound in activity in Q2 looks to be in good shape. Our new forecast shows GDP growth of 7.2% in 2021, well above the consensus of less than 5%. Even before restrictions are relaxed, a broad range of data suggests that activity has firmed.

What you will learn about:

• The PMIs have had a patchy record of predicting changes in GDP during the pandemic.
• Higher new car registrations and stronger high frequency data added to evidence of firming activity.
• We expect GDP to fall by 2% in Q1, but the risks are skewed towards a smaller fall.