United Kingdom: 2020 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for the United Kingdom
IMF Staff Country Reports, December 18, 2020
Source details
- Canonical URL
- United Kingdom: 2020 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for the United Kingdom
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Bibliographic details
- Published: December 18, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513564777.002
Overview
- The UK entered 2020 negotiating a new economic relationship with the EU and facing other challenges, including meeting climate targets, dealing with an aging population, and reinvigorating tepid productivity growth.
- Growth and investment had been weak since the 2016 referendum, and the current account deficit elevated, but unemployment was low, inflation on target, and balance sheets strong.
- The global pandemic hit the UK hard in March, and the country now faces a second wave.
- The economic impact has been severe, but helped by an aggressive policy response, jobs have been preserved, businesses kept afloat, and banking sector losses contained.
Economic impact and near-term outlook
- The outlook for the near term is weak, as the economy works through the second wave, Brexit, rising unemployment, and corporate distress.
- Risks are overall to the downside, centering on the degree of balance sheet damage sustained by households and small and medium enterprises.
- The pace at which vaccines are able to bring the pandemic under control could be an important mitigating factor.
Key analytical themes and subjects covered
- Subject: COVID-19, Expenditure, Fiscal policy, Health, Inflation, Labor, Prices, Public debt
- Keywords: activity data, bank dividend payment, COVID-19, CR, draft UK, Europe, Global, Inflation, ISCR, NI Protocol, welfare provision, withdrawal agreement
Policy response and implications
- An aggressive policy response helped preserve jobs, keep businesses afloat, and contain banking sector losses.
- Continued policy attention is implied for managing rising unemployment, corporate distress, and balance sheet repair for households and small and medium enterprises.
- Vaccine rollout speed is highlighted as an important factor that could mitigate downside risks.
Publication and metadata
- Pages: 93
- Volume: 2020
- Issue: 320
- Series: Country Report No. 2020/320
- DOI: https://doi.org/10.5089/9781513564777.002
- Stock No: 1GBREA2020001
- ISBN: 9781513564777
- ISSN: 1934-7685
- Publication date on landing page: December 18, 2020
International Monetary Fund. "United Kingdom: 2020 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for the United Kingdom", IMF Staff Country Reports 2020, 320 (2020).
Content in this bundle
- 1gbrea2020001