Never have the opening lines of TS Eliot’s The Wasteland seemed more apt. In 2020, April really was the cruellest month, as the first wave of Covid-19 deaths peaked and businesses were shuttered. Between March and April, UK output slumped by a fifth.
This year, April will be different. The success of the vaccine programme means the government can go ahead with the next phase of the gradual unlocking of England’s economy. From Monday, it will be possible to go to the pub for a pint, provided you are prepared to brave the spring weather and drink outside.
Unless something goes seriously awry, further easing of restrictions will follow, allowing the return to a semblance of normality by the middle of the year. Make no mistake, the picture looks a lot brighter than it did in late December, when the talk was of how “Plague Island” would be overwhelmed by a combination of the pandemic and Brexit chaos.
It would be wrong to imagine that there have been no repercussions from the third wave of Covid-19 or from the UK’s new trading arrangements with the European Union, but neither has been as catastrophic as was feared. The M20 has not been turned into a giant lorry park and any Brexit disruption was dwarfed by the EU’s heavily criticised vaccine programme, which was the perfect advertisement for nation states having the autonomy to make their own procurement decisions.
The hit to the economy’s output in January – the first month of the new national lockdown – was 2.9% of gross domestic product rather than the 19% drop suffered last April. Firms have started to hire. Consumer and business confidence has picked up sharply. The International Monetary Fund has revised up its forecast for the UK this year.
In the short term, it is not hard to find reasons why the UK should grow strongly. Interest rates are at rock bottom levels and the March budget announced fresh stimulus measures, including the extension of the furlough and the stamp duty holiday for people buying a home. Businesses think there is light at the end of the tunnel.