London Daily

Focus on the big picture.
Thursday, Mar 12, 2026

UK set for stronger post-Covid recovery, says OECD

UK set for stronger post-Covid recovery, says OECD

The UK economy's recovery from the pandemic is set to be stronger than previously thought, a leading international agency has suggested.

The Organisation for Economic Co-operation and Development says the UK is likely to grow 7.2% in 2021, up from its March projection of 5.1%.

The OECD raised its forecast for global growth to 5.8%, compared with the 4.2% it predicted in December.

However, it warned that growth would not be shared evenly.

The UK's growth is set to be the fastest among the large rich countries, the OECD says.

UK Chancellor Rishi Sunak attributed the strength of the forecast to the success of the UK's vaccine rollout and the government's Plan for Jobs.

However, he cautioned that with debt at nearly 100% of GDP, there was a need to "ensure public finances remain on a sure footing".

The OECD said prospects for the world economy had brightened, with activity returning to pre-pandemic levels.

However, they remained short of what had previously been expected by the end of 2022.

The OECD praised stimulus measures and swift vaccine rollouts in richer countries for boosting growth, but said the slow jab distribution in many developing countries threatened to blight their economic progress.

It said the recovery would remain uneven and vulnerable to fresh setbacks as long as a large proportion of the world's population were not vaccinated.

Global growth will be led by a strong upturn in the US, where GDP is forecast to reach 6.9% this year, before easing to 3.6% in 2022, the OECD added.

Output in China has also caught up, but emerging-market economies, including India, may continue to have large shortfalls in GDP.


The strong forecast this year for the UK reflects the key role that vaccination plays in supporting economic recovery. It is the fastest growth among the large rich countries - and within the wider G20, it's behind only India and China. But that also reflects the UK rebounding from a downturn that was one of the deepest.

The OECD report gives a flavour of how countries are performing over the course of the health crisis by setting out how long it expects them to take to get back to pre-pandemic levels of economic activity (GDP) per capita. For the UK, it's the middle of next year, along with Italy and Canada.

That's a few months ahead of France and Spain but behind the US, Japan and Germany. It's also behind several emerging economies, including China, which was the first to regain the lost ground.

OECD Secretary-General Angel Gurría said there was an urgent need to "step up the production and equitable distribution of vaccines".

"Effective vaccination programmes in many countries has meant today's economic outlook is more promising than at any time since the start of this devastating pandemic," he said.

"But for millions around the world, getting a jab still remains a distant prospect. We urgently need to step up the production and equitable distribution of vaccines."

OECD chief economist Laurence Boone urged stronger international co-operation between nations to help provide poorer countries with resources to vaccinate their populations.

Income support for people and businesses should continue, but as restrictions ease, these should be "better targeted" where they are needed most, including through retraining and job placement.

The OECD said support also needed to focus on "viable businesses to encourage a move away from debt into equity, and to create jobs and invest in digitalisation".

Foreign trade


Public debt has risen in most economies as a result of the pandemic, but current low interest rates have made servicing the debt manageable.

In the UK, while GDP is predicted to return to pre-pandemic levels next year, the OECD warns that increased border costs following Brexit will hit foreign trade.

Unemployment is also expected to peak at the end of 2021, with a predicted rise to 6.1% when the furlough scheme ends.

It will reach an average of 5.4% in 2021, above 2020 levels of 4.5% and 2019 levels of 3.8%.

The OECD recommends the UK government should maintain support measures until economic recovery is under way, focusing on businesses and sectors with the best growth prospects.

The report also says a closer trade relationship with the EU would improve the economic outlook in the medium term.

Newsletter

Related Articles

0:00
0:00
Close
Release of Mandelson Files Raises Tensions as UK Seeks Stable Relations With Donald Trump
UK Documents Reveal Starmer Was Warned About Mandelson’s Epstein Links Before Ambassador Appointment
Nearly Five Hundred UK Mortgage Deals Withdrawn in Two Days as Market Volatility Forces Lenders to Reprice
Three Cargo Ships Hit Near Iran as Attacks Spread to Strategic Strait of Hormuz
Why British Police Repeatedly Declined to Investigate Jeffrey Epstein’s UK Links
UK Parliament Ends Hereditary Seats in House of Lords, Closing Chapter on Centuries of Aristocratic Lawmaking
EU and UK Urge Israel to Act Against Rising West Bank Settler Violence Amid Regional Tensions
US Senator John Kennedy Says Keir Starmer Should Not Be Trusted for Military Advice Amid Iran War Debate
UK High Court Rejects Attempt to Revive Terrorism Charge Against Kneecap Rapper
Revolut Secures Full UK Banking Licence After Multi-Year Regulatory Wait
Kentucky’s Bench Boost Powers Wildcats Past LSU in SEC Tournament Opener
British Couple Die After Being Pulled From Water at Australian Beach During Family Visit
Global Energy Agency Announces Record Release of 400 Million Barrels to Stabilize Oil Markets Amid Hormuz Disruption
British Airways Suspends UK Repatriation Flights as Middle East Travel Disruption Deepens
US Forces Prepare Ordnance at RAF Fairford as Strategic Bombers Deploy for Middle East Operations
Nigel Farage Faces Criticism After Saying Britain Should Stay Out of Iran War
Landmark UK Trial Begins Over Sony’s PlayStation Store Pricing
UK High Court Rejects Bid to Challenge Britain’s Chagos Islands Agreement With Mauritius
Finnish Duo Triumphs in England’s Annual Wife-Carrying Race, Winning a Barrel of Ale
How U.S. and UK National Security Strategies Are Reshaping the Global Business Landscape
Green Party Gains Momentum as Labour Shifts Toward the Political Centre
Royal Navy Destroyer HMS Dragon Sets Sail for Eastern Mediterranean as Regional Tensions Rise
UK Homebuilder Persimmon Warns Iran Conflict Could Dent Property Buyer Confidence
Roman Abramovich Signals Legal Fight if UK Seeks to Seize Chelsea Sale Funds
UK Ready to Back Emergency Oil Reserve Release as Middle East Conflict Pushes Prices Higher
Study of 40,000 Articles Sparks Debate Over Alleged Anti-Muslim Bias in UK Media
US and UK Army Chiefs Strengthen Cooperation on the Future of Armored Warfare
Britain’s Search for the Next ARM Intensifies as Startups and Investors Target the Semiconductor Frontier
Three US Strategic Bombers Arrive at RAF Fairford as Iran Conflict Intensifies
Cancer Death Rates in the UK Fall to the Lowest Level on Record
UK Government Bond Yields Retreat Slightly After Sharp Spike Triggered by Middle East Conflict
UK Chancellor Warns Middle East War Could Push Inflation Higher
UK Prime Minister Warns Iran Conflict Could Drive Up Prices and Threaten Economic Stability
Trump Declines UK Offer to Deploy Aircraft Carriers to Middle East Amid Iran Conflict
Prince Harry and Meghan Markle to Return to Australia After Seven Years for Philanthropic and Business Engagements
UK Government Signals Independence From Washington as Cooper Says Britain Does Not Agree With Trump on Every Issue
UK Experts Warn AI Chatbots Are Fueling Surge in Claims of Organised ‘Satanic’ Ritual Abuse
UK Political Parties Divided Over Strategy as Iran Conflict Reshapes Foreign Policy Debate
Britain Discloses Secret Military Repair Hubs Operating Inside Ukraine
Trump Says US No Longer Needs UK Carrier Support After Delayed Offer Amid Iran Conflict
Why Britain Has Become Involved in the US-Israel Military Campaign Against Iran
UK Gas Storage Falls to Under Two Days as Iran Conflict Jolts Global Energy Markets
UK Warned to Brace for Economic Shock as Iran War Drives Global Energy Price Surge
Starmer and Trump Hold First Call After Public Dispute Over Iran Conflict
UK Dentists Returned £1.3 Billion to Government as Shift Toward Private Care Accelerates
Expert Warns UK Must Build Emergency Food Stockpiles to Prepare for Climate Shocks or War
UK Plans Charter Flight to Evacuate British Nationals from Gulf as Regional Conflict Disrupts Air Travel
Families of Zimbabwe’s Liberation Fighters Call on Britain to Help Locate Skulls Taken During Colonial War
Iran’s Ambassador Warns Britain to ‘Be Very Careful’ Over Deeper Role in Expanding Middle East War
UK Military Leadership Defends Britain’s Defensive Role in Expanding Middle East Conflict
×