Covid: Bank of England provides more good news but Brexit's shadow will be long – Scotsman comment

After much good news – about the effectiveness of the Covid vaccines – comes even more. The Bank of England now expects the UK’s gross domestic product to “recover rapidly towards pre-Covid levels over 2021”.

The Bank of England predicts a rapid economy recovery this year if mass vaccination against Covid allows easing of the lockdown (Picture: Yui Mok/PA Wire)

The caveat is that the bank’s Monetary Policy Committee (MPC) made their prediction based on the assumption that the vaccination programme will “lead to an easing of Covid-related restrictions and people’s health concerns”.

So that is further reason, if one were needed, for politicians to make sure the process is carried out as swiftly as possible and for the public to make sure we get inoculated when our turn comes.

Just how vital that is should be underlined by forecasts that the unemployment rate will rise from the five per cent recorded between September and November to 7.8 per cent later this year as the furlough scheme is phased out.

And the self-inflicted wound of Brexit is likely to plague the economy throughout this year and beyond.

While Boris Johnson has claimed his trade deal with the EU was of the “have your cake and eat it” variety and even, quite wrongly, that there are no barriers to trade, the reality is considerably different as some businesses have already discovered.

The UK government may dismiss such troubles as “teething problems” but the MPC’s report states clearly that there are “some barriers to trade, including customs processes and some regulatory requirements” even if there are no tariffs.

The recovery will also not be uniform across the country. A recent report by professional services firm PwC and think-tank Demos found that while Edinburgh’s economy had been the least affected of 42 major cities across the UK by the pandemic, its growth this year was expected to be the lowest at 3.9 per cent.

The tourism and hospitality sectors are particularly important to Edinburgh and are likely to take longer than others to recover as it will take time for international travel to return to pre-Covid levels. And that means they may require more help from government if this crisis is to be overcome as quickly as possible.

However, right now, it does seem like the road to recovery is ahead of us and the worst will soon be behind us.

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