Thread by @faisalislam

Interesting new set of @OECD projections...

World (up 1.4%) and UK (0.9%) upgraded in back of vaccinations, US much more so on back of Biden stimulus (+3.3%)...

But medium term UK biggest hit by end of 2022 in G7...

USA expected to have bigger economy than 2019 projection:

Oecd high frequency data comparison - shows the significant hit from pandemic and lockdowns on UK weighing down the economy - but eg Germany too now about same down

UKs stimulus efforts much smaller vs US and Canada according to Oecd model but a bit bigger than Japan and Eurozone - this may not take latest budget into account, but can’t see that this would change table significantly:

Looking back over 2020, the OECD use this Q4/Q4 measure - which shows UK with biggest hit in G20 and G7 (Spain isn’t a full G20 member) pandemic size & concentration on social/service sector big factors- Govt points to different measurement of public services as factor here:

OBR, independent Government forecaster, concluded at Budget that simply stripping out Govt consumption (to account for measurement differences) would close gap on UK 2020 G7 underperformance, but still leave UK at bottom in G7 (Spain not in G7)... 1/3

A high degree of exposure of our economy to “social consumption” explains some of this 2020 economic underperformance, but not all - also Spain/Italy, says OBR:

But, concluded the OBR in its Budget forecast “primary reason UK has suffered a greater economic hit” is “simply that the UK experienced higher rates of infections, hospitalisation and deaths from the virus than other countries”... and “spent longer in stricter lockdowns”

..add together OECD and OBR and picture is, big vaccine fuelled bounce back, but not one in UK that quickly makes up for the 2020 economic underperformance vs other advanced countries arising from worse health picture then.

Additionally US stimulus leads to take off 🚀 there...

And this is the oecd chart comparing rising government borrowing costs/ bond yields - still extremely low by historic standards, but not as freakishly low as a few weeks back:

fascinating @oecd chart showing those nations with very high corporate debts, measured by debt service ratios... compared to financial crisis...

GB and France were same on this measure in 2009 - GB deleverages as does Spain, US, Aus. France China and Canada go in other direction

Going to hear from Chancellor shortly in Commons, but the Government would clearly hope that the quicker vaccine rollout and therefore reopening of social economy will improve these comparisons more significantly...

Clearly such forecasts are even more challenging than normal.

BLOG:

OECD forecasts super strong US recovery on back of Biden stimulus, as UK’s 2020 economic hit (most in G7, and nearly so in G20) not forecast to be made up for by impact of vaccine success... also refers to OBR’s like-for-like G7 econ comparisons

https://twitter.com/bbcbusiness/status/1369335175109296130?s=21

Here’s the OBR’s data settling the argument about comparability of G7 economic performance in 2020 (Spain and NL also included) - strips out Government consumption, focuses on private sector growth during 2020 - Italy and France hits get closer to UK, but UK still hardest hit: