Barclays Chief’s predictions that the UK economy heads towards an unprecedented boom, the UK has never witnessed, drives the final nail in the coffin for the case cogently put forward by Brexit– skeptics who virtually reduced Prime Minister Boris Johnson’s Global Britain as a mere pipedream.
Jes Staley forecasted the strongest year for economic growth since the aftermath of the Second World War, at 6.5% this year, as “tremendous pent-up demand” built up during the pandemic is released.
“So we see – just like you’re starting to see in the US as well – quite a robust economic recovery in 2021,” Staley said. “We think that will carry through into 2022.”
He also noted that that Europe “may have a little bit of a tougher time” in comparison because of its slower vaccine rollout. “The UK has done so well around the vaccination process, basically 50% of the population is now vaccinated. I think that’s going to allow the economy to open up sooner than what you might see in other countries.”
He made the assessment of the outlook for the UK economy as Barclays published its first-quarter results, which indicated profits at the bank more than doubled over the period to £2.4bn.
While the bank saw a drop in consumer spending at the start of the year, Staley said the trend was already reversing, helped by the “extraordinary success” of the UK’s vaccination programme.
According to him, spending was already up 70% during the first two weeks of April, compared with a year earlier.
The positive forecast hints out that the lender was able to put aside a smaller sum to cover customer defaults linked to the pandemic. It recorded a £55m charge to cover bad debts, a fraction of the £2.1bn set aside during the same period last year.
It also means that Barclays, which put aside a total £4.8bn to cover potential customer defaults in 2020, easily beat analyst estimates for a £503m charge in the first quarter.
But the recovery may be uneven from the pandemic, Staley reaffirmed that the bank had temporarily shifted some of its Indian operations back to the UK as the south Asian country struggled with a devastating increase in Covid-19 cases.
The chief executive said the outbreak of Covid, which has exhausted healthcare system and crematoriums, had put pressure on its approximate 20,000 local staff, some of whom had to take time off work to take care of family and loved ones.
“We are very focused on India right now. That’s our second employee location,” he said, adding that the bank had donated £1m to charities distributing medical supplies across the country in last week alone. “We all want to be focused on trying to help India come out of this pandemic”.
Successful rolling out of vaccine in the UK and government’s incentive programs to kick start business and protect the jobs have, by and largely, contributed to the UK’s brighter than ever prospects of not only economic recovery, but also of a boom that would help the UK to carve out its role as a Global Britain, spreading its good will, once again, throughout the globe.
