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Even economists find reasons to be cheerful as Britain set for Spring splurge

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Reasons to be cheerful as economy begins faster than expected bounceback
S

o the economy only grew by 0.4% in February, that’s not very good is it?

It’s better than it sounds, a small number which means quite a lot. It’s about £10 billion added to the economy in straight money terms, but more important is the direction of travel.

The January figure was revised upwards from -2.9 to -2.2, so we didn’t contract as much as we thought. And in February, even with us all mostly still locked up, the economy started to grow.

Spring boom on the cards then?

A lot of people think so. Virgin Red predicts a £44 billion two-week April spending splurge as we splash out with the money we have saved in lockdown.

Even dour economists have started to make concessions to optimism. And begun to admit previous forecasts were too bearish.

Phil Shaw at Investec wrote today: “Together with January’s revisions, the level of GDP in February is +0.6% higher than our estimates. Moreover the series of upward monthly changes to 2020, outlined in the Quarterly National Accounts release a couple of weeks ago, were confirmed. Our GDP forecast for 2021 is currently +7.3%, but factoring in both sets of revisions and keeping our forward profile unchanged would lift this by around one percentage point.”

So 8% growth this year is on?

It could be. Certainly, the economy is bouncing back quicker than previously thought, giving hope to businesses around the country that they can survive Covid.

Paul Craig at Quilter Investors said:

“After an extremely challenging year for the economy, culminating in a 10% knock to GDP over the course of 2020, the first signs of an economic recovery in February are enormously welcome. First of all, and despite all manner of headlines since March 2020 proclaiming that many businesses will collapse…this hasn’t materialised in a major way.”

The International Monetary Fund (IMF) expects the UK to post 5.3% growth in 2021, and 5.1% in 2022. This would make the UK the fastest-growing G7 country.

Ulas Akincilar, at the online trading provider, INFINOX, says:

“The bounceback is on. While many had hoped for a faster rate of growth, UK output expanded in February, and as lockdown restrictions continue to ease across the country, there’s an increasing sense of the shackles coming off the economy.”

Are economists too pessimistic in general?

Well, the dismal science has lately been doing little to live down its reputation. Namely that it is a bunch of pointy heads forever looking backwards, finding reasons not to be cheerful and then forecasting pain.

With honourable exceptions — Capital Economics has had a good crisis – expert predictions of what official figures would show on output, GDP, consumer sentiment and much else have routinely shown to be unduly negative.

The assumption has always been that since we are in a hole, it would only get deeper.

Actually, economically and in other ways, we have reminded ourselves that we are a more resilient nation than we usually give ourselves credit for.

It looks like the economics profession has underestimated the ability of businesses and households to adapt, and moreover to just keep going, if only out of necessity.

This isn’t to downplay the very real pain suffered in the last year by, well, all of us one way or another.

But it does feel that the economists play to our worst instincts, our national inclination to see only the dark side of financial forces.

Cheer up lads. Really, it might never happen.

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Flight costs soar prior to travel green checklist is revealed

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Flight prices soar before travel green list is revealed

Transportation Secretary Grant Shapps is predicted to publish the checklist of nations, from which travellers returning to England will not have to quarantine, in a Downing Avenue briefing at 5pm.

These are likely to include things like Portugal, Iceland and Malta, and probably also Israel and Gibraltar — with the easing of procedures commencing in 10 times.

But journey brokers described a hurry of individuals scheduling breaks to these vacation hotspots in anticipation of the announcement. The value of some airline tickets has now surged, with vacation to Portugal’s resorts on Could 17, from when the restrictions ease, much more than doubling in price in the final two times. Final night, Ryanair was charging £152 for a flight from Stansted to Lisbon, in comparison with £15 the day in advance of limitations carry.

The “traffic light” system for England will spot more restrictions on trips to “amber” and “red” nations around the world. At existing, overseas leisure travel is banned.

It arrived amid a warning from Booking.com’s chief govt Glenn Fogel that selling prices for global journey are established to rise this year owing to pent-up need and much less aeroplanes in provider. “There’s so a lot pent-up demand from customers,” he informed the BBC. “Everybody needs to go travelling, but we all want to do it securely.”

Spain, France, Italy and Greece are predicted to be on the amber record but could switch to inexperienced at a “checkpoint” review on June 28. Assessments will be primarily based on a variety of things, such as the proportion of a country’s population that has been vaccinated, costs of an infection, rising new variants, and the country’s access to responsible scientific data and genomic sequencing.

Folks arriving from a green place will not need to have to quarantine on their return and will have to just take a single PCR test in just two days of arriving. All those returning from an amber state have to self-isolate for at the very least 5 days and consider two exams. The crimson checklist involves an 11-evening stay in a quarantine hotel at a charge of £1,750.

There will also be a “green view list”, to give travellers advance observe of nations about to go to amber or pink.

Luis Gallego, main govt of IAG, urged the Authorities to “be a little bit ambitious in obtaining world wide travel back on track”. He wants persons who have been vaccinated or tested to be permitted to fly “without restrictions” involving the United kingdom and the US. The airline reported it will launch a new advertising marketing campaign showcasing workers who are “preparing to return to function after a very challenging year”.

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