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UPDATE 1-UK economy set to grow faster than the U.S. this year - Goldman

Mon, 26th Apr 2021 11:40

(Adds updated comparison forecasts in third paragraph)

LONDON, April 26 (Reuters) - Britain looks set to see faster
economic growth than the United States this year as the country
races ahead with its vaccination programme after its slump in
2020, Goldman Sachs said on Sunday.

The bank said in a note to clients that it now expects
British gross domestic product to grow by a "striking" 7.8% this
year, "above our expectations for the U.S."

Previously, Goldman had expected Britain's economy would
grow by 7.1% this year and its forecast for U.S. growth in 2021
stands at 7.2%, helped by U.S. President Joe Biden's huge fiscal
stimulus programme.

A Reuters poll of analysts published on April 13 showed an
average forecast for growth of 5.0% in the UK, the world's
fifth-biggest economy, in 2021. The International Monetary Fund
has projected a 5.3% expansion.

But since those forecasts were made there have been signs of
an acceleration in the pace of recovery with the country now
having given a first coronavirus vaccine to more than half of
its total population.

"The UK economy is rebounding sharply from the Covid
crisis," Goldman Sachs said.

"The April flash PMI was much stronger than expected in the
UK, with the services PMI moving strongly further into
expansionary territory," it said.

The bank also noted a much-stronger-than-expected 5.4%
monthly jump in retail sales in March.

Britain's economy shrank by nearly 10% last year as it was
hit by longer coronavirus lockdowns than many of its peers. By
comparison, the U.S. economy shrank by an estimated 3.5%,
according to the IMF.

On Saturday, Bank of England Deputy Governor Ben Broadbent
was quoted as saying he expected "very rapid growth at least
over the next couple of quarters" as the country lifts its
coronavirus restrictions.
(Writing by William Schomberg; Editing by Susan Fenton)

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