Page 5 - April ISQ 2021

APRIL 2021

20

16

12
% GDP

8

4

0
2019 - 20 2020 - 21 2021 - 22 2022 - 23 2023 - 24 2024 - 25 2025 - 26
PSNB CAPD
GFC Peak (PSNB) GFC Peak (CAPD) Post-war average (PSNB)

Source: O ice for National Statistics, O er for Budget Responsibility and HM Treasury Calculations.

the change is currently anticipated to be relatively moderate. In And finally we are back to the consumer. With unemployment
short, whilst the raised debt levels do mean that higher tax levels now expected to peak more rapidly than anticipated last
levels will occur over upcoming years the increase is not yet too year, hopes for significant progress in consumer spending
dramatic and is unlikely alone to significantly hold back U.K. levels - assuming continued opening up of the U.K. economy –
growth recovery. will also positively impact the U.K. financial markets.

Globally there is always the potential for uncertainties centred
“ on excessive optimism, too much debt, diplomatic challenges,
Whilst the raised debt levels do mean
and unanticipated weather or earthquake effects. For the mar-
that higher tax levels will occur over kets over time the most challenges later this decade will come
upcoming years the increase is not yet from the rapid increase in global debt levels. But this - in all like-
lihood - is something for 2022 and beyond and not for this year,
too dramatic and is unlikely alone to which will give governments and central banks around the
significantly hold back U.K. growth world further time to find more solutions for the rest of the
2020s. Meanwhile for this year, the outlook for 2021 - on bal-
recovery. ” ance - still suggests further improvement. And the U.K. - after its
economic difficulties last year - is set to bounce back well over
the rest of this year and into 2022.
But how about global trade opportunities? Undoubtedly
impacts from differing levels of COVID-19 vaccination progress KEY TAKEAWAYS:
will have some impacts on both export and important trends,
but still the most important issue for upcoming years remains • The U.K. economy in 2020 saw its biggest contrac-
centred on Brexit. The forging of a deal just before Christmas tion in over three centuries.
last year was a positive move with the part of the world which • Whilst corporation and personal taxation rates are
will continue to generate the most trade opportunities for the rising, other benefits are helping.
U.K. for the foreseeable future. Whilst there are still some prac- • Brexit issues can still impact the economy but the
tical uncertainties, economy-wide impacts are unlikely to be threat of any global trade wars are low.
extremely negative for the 2020s assuming trade wars can be
avoided (a likely scenario even with China). • U.K. reopening is likely to help boost economic pro-
files - and the stock market - this year.

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