Read on Twitter
Thread on what the earlier roll-out of a coronavirus vaccine means for the UK economy. 
Obviously good news because it means normal economic life can return sooner....1/
Obviously good news because it means normal economic life can return sooner....1/
...But HOW good is this news? Is it quantifiable?
Happily, we can judge what the @OBR_UK roughly thinks from its scenarios published in last week’s #spendingreview...2/
Happily, we can judge what the @OBR_UK roughly thinks from its scenarios published in last week’s #spendingreview...2/
...There was a rather depressing central scenario, which assumed no national vaccine roll out until mid-2021 and high-medium” public health restrictions in place until then...3/
...But there was also an “upside” scenario which assumed vaccines widely available from spring next year and “medium-low” restrictions in place until then.
Not exact match of course, but today’s news seems to move us closer to upside than central scenario....4/
Not exact match of course, but today’s news seems to move us closer to upside than central scenario....4/
...So what are the implications?
First, for unemployment.
Much lower peak next year (5.1% vs 7.5%)...5/
First, for unemployment.
Much lower peak next year (5.1% vs 7.5%)...5/
...Lower unemployment, alongside lower damage to business investment, is one of reasons why there’s less scarring to the economy.
In upside scenario activity back to pre-crisis trend in 2022, rather than having a 3% gap still in 2026...6/
In upside scenario activity back to pre-crisis trend in 2022, rather than having a 3% gap still in 2026...6/
...This stronger GDP growth has big implications for public borrowing.
Deficit in 2024-25 is just 1.7% rather than 3.9%.
This considerably reduces the need for tax rises and spending cuts to keep the national debt from rising (would be heartily welcomed by @RishiSunak)...7/
Deficit in 2024-25 is just 1.7% rather than 3.9%.
This considerably reduces the need for tax rises and spending cuts to keep the national debt from rising (would be heartily welcomed by @RishiSunak)...7/
...Lots of caveats of course.
These are CONDITIONAL forecasts.
They assume the vaccine is effective and gives lasting immunity.
They assume efficient roll out of vaccine.
The assume no policy failures such as no-deal Brexit or premature fiscal tightening...8/
These are CONDITIONAL forecasts.
They assume the vaccine is effective and gives lasting immunity.
They assume efficient roll out of vaccine.
The assume no policy failures such as no-deal Brexit or premature fiscal tightening...8/
...None of that is guaranteed.
Yet these forecasts give a decent indication of how much economic benefit the OBR thinks come from an earlier roll out of vaccination.
And those benefits are significant.
More from me in @indypremium here
ENDS/ https://www.independent.co.uk/independentpremium/news-analysis/vaccinations-uk-economy-impact-b1765017.html
Yet these forecasts give a decent indication of how much economic benefit the OBR thinks come from an earlier roll out of vaccination.
And those benefits are significant.
More from me in @indypremium here
ENDS/ https://www.independent.co.uk/independentpremium/news-analysis/vaccinations-uk-economy-impact-b1765017.html
