Britain's economy is expected to regain its pre-pandemic size in the middle of next year, six months earlier than previously forecast, finance minister Rishi Sunak said on Wednesday as he began an annual budget speech.
But the economy would still be 3% smaller in five years' time than it would have been without the damage wrought by the coronavirus, he said.
Sunak, announcing forecasts by the Office for Budgetary Responsibility (OBR), said the economy was likely to grow by 4%in 2021, slower than a forecast of 5.5% made in November.
Looking further ahead, the OBR forecast gross domestic product would grow 7.3%, 1.7% and 1.6% in 2022, 2023 and 2024 respectively. In November, the OBR had forecast growth of 6.6%, 2.3% and 1.7%.
Sunak promised to do "whatever it takes", including a five-month extension of a huge jobs rescue plan, to steer the economy through what he hopes will be the final months of pandemic restrictions.
Sunak has already racked up Britain's highest borrowing since World War Two and he was due to say that the task of fixing the public finances will only begin once a recovery is in sight, according to excerpts of his speech released on Tuesday.