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Banking Boss Heralds Boom-Time

Posted by Caribbean World Magazine on 5 May 2021 | 0 Comments

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5 May 2021

Jes Staley, the Barclay’s Bank boss, predicts the biggest economic surge in the UK since 1948 saying the second half of 2021 "will be quite something". 

The UK is about to experience its biggest economic boom since the aftermath of World War 2, according to the boss of Barclays Bank. Jes Staley’s upbeat assessment has giving hope to millions of businesses, and came as Barclays revealed its profits for the first three months of this year had more than doubled from a year earlier to £2.4billion. 

The vaccine programme and a collective build-up of savings will help to drive the rebound,

Mr Staley suggests. Barclays' estimate of an extra £200bn sitting in customer and company bank accounts has meant the UK joining the US in seeing some of the fastest economic growth in decades. The boost in Barclays' latest profits was almost entirely driven by a more confident view on how many of its loans would be repaid. 

"We estimate the UK economy will grow at its fastest rate since 1948. That's pretty spectacular," Mr Staley said, adding that: ““Our economic forecast is for the UK economy to grow by 6.5% this year”. 

It is a very different tone from this time last year, when the bank set aside more than £2bn to cover the risks that borrowers would be unable to repay all of their debts. This time round they are setting aside just £55m, and, like other major banks in both the U.K. and America, they haven’t adjusted previous estimates of bad loan previsions, but hinted that they will do so in the future. 

A buoyant Mr Staley was in upbeat mood as he delivered his assessment, convinced that despite virus-related disasters in developing economies such as India and new lockdowns in developed counties such as Japan, the overall picture looks to be improving. 

“There’s tremendous pent-up demand, both with the consumer and small businesses, and we see that as a result of the vaccination programme, which has been an extraordinary success inthe UK.”  

Although many business sectors, such as leisure and hospitality, have faced desperately challenging circumstances many of the workers still on furlough are due to to return to work shortly as the next phase of restrictions are lifted.  

The rosy picture of the UK's economic future, and talk of an economic boom, will give hope to all business impacted by the biggest economic downturn in 300 years. Mr Staley - and his US counterparts - certainly feels that the worst is in the past. The banking giant is forecasting 6.5 per cent growth this year, plus a “boom-time” that will see the U.K. bounce back in an economic recovery that will be the strongest since the post-war period. 

Goldman Sachs economist Sven Jari Stehn is even more optimistic that Mr Staley. He believes the UK will bounce back faster and stronger than America due to the vaccine rollout.  

“The U.K. economy is rebounding sharply from the Covid crisis,” said Mr Stehn. “Given recent upward revisions to real gross domestic product, our 2021 forecast is now at a striking 7.8% for 2021, above our expectations for the US (Goldman forecasts it to grow 7.2%) and sharplyabove the Bloomberg consensus of 5.5%.”  

Result of the vaccination programme, which has been an extraordinary success in the UK.”