The economy will not get back to pre-pandemic levels until 2024 as hopes of a V-shaped recovery evaporate, the EY Item Club has warned.
The forecasting body expects a record recession as the economy contracts by 11.5 per cent this year, almost as severe as the Office for Budget Responsibility’s central scenario, followed by a slow rebound. Unemployment will more than double, it says, from 3.9 per cent to 9 per cent, leaving roughly three million people out of work as the furlough scheme ends.
The EY Item Club, which uses a forecasting model similar to the Treasury’s, has downgraded its outlook since June. The recession will be deeper and recovery to pre-Covid-19 levels will take 18 months longer as weak consumer confidence holds growth