Wave of cash from rich firms will turbocharge the recovery, says Chancellor Rishi Sunak
Cash-rich companies and consumers will unleash a wave of spending to turbo-charge Britain’s recovery from the pandemic, the Chancellor has declared.
With analysts suggesting the UK is heading for its strongest year of economic growth since the Second World War, Rishi Sunak pointed out there is £100billion in UK businesses’ bank accounts waiting to be invested.
It came as Bank of England figures showed households saved another £16.2billion in March, taking the total squirrelled away during the pandemic to £203billion. The Bank also said mortgage lending hit a record high of £11.8billion in March.
Spending power: Chancellor Rishi Sunak pointed out there is £100bn in UK businesses’ bank accounts waiting to be invested
And in a further boost, research group IHS Markit said its index of activity in UK manufacturing hit 60.9 in April – the best performance for 27 years.
At the Wall Street Journal’s CEO council summit, Sunak said: ‘As we look forward to reopening over coming weeks and months, there are signs to be cautiously optimistic and we can see that in the data. I’m hopeful that will be sustained through the rest of the year.
‘We are seeing consumer confidence back to pre-pandemic levels. We know that there is an enormous amount of excess savings. We have tried to put things in place to unlock some of that cash. The signs are promising.’
Bank of England chief economist Andy Haldane has said the economy will bounce back like a ‘coiled spring’ as some of this money from ‘accidental savers’ is spent after the removal of restrictions.
Analysts at Goldman Sachs believe the UK economy will grow by a ‘striking’ 7.8 per cent this year following last year’s near-10 per cent slump.