The Confederation of British Industry (CBI) has released a more optimistic Economic Forecast than was widely predicted, Accountancy Today reports. The latest figures point towards a swift bounce back to pre-Covid levels, with an expected growth of 8.2% this year, followed by a rise of 6.1% in 2022.

Thanks to the government’s generous furlough scheme which has been extended until September, the worst-case scenario for unemployment has been avoided. The labour market in general has performed more strongly than expected, with growing numbers of vacancies in many sectors, including hospitality, which is struggling to recruit staff.

Both the Bank of England and the CBI predict that unemployment will peak at 5.5% in the autumn, when the Jobs Retention Scheme winds down. During 2022, employment rates are expected to rise in the face of a strong economic recovery.

Business investment is expected to ‘claw back’ some losses in the revived economy, although it will remain at 5% below its pre-Covid level at the end of 2022, the article reports.

Tony Danker, director-general, CBI, said: “The data clearly indicates that there is pent up demand and ambition across many sectors. The imperative now must be to seize the moment to channel this investment into the big drivers of long-term UK prosperity.”

Danker added: “Extending the commercial rent moratorium will help keep some firms’ heads above water, but the government must also do the same on business rates relief. It would be devastating for hospitality, events or aviation businesses to fail on what we hope is the last leg of restrictions.”

The director-general also sounded a note of caution over the sectors which have been hardest hit by the pandemic, and still face uncertainty over future business models. The extending of the remaining lockdown restrictions beyond 21 June will particularly affect the leisure and entertainment industries, for example.

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