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Hey America, Yours is Not Bigger Than Ours

Posted on Apr 27, 2021. by NTI

Is America the best country in the world? If you haven't already, you should enter 'The Newsroom - speech' into Google, which will allow you to listen to one of the most polemic movie speeches of all time, by Jeff Daniels, when he is asked if America is the greatest country in the world. Mr Daniels' character tells us that the United States is No. 1 in three things; the number of human beings who are incarcerated per capita, the number of people who believe angels are real and defence spending (where the US spends more than the next 26 countries combined, 25 of whom are allies).

There is no question that, with two hundred million of its citizens beings vaccinated against Covid-19 and counting, it is one of the nations leading us out of the global pandemic, but according to one of its own banks this morning (Tuesday 27 April), it will not out-perform our own dear UK in growth this year. Today Goldman Sachs forecasts that it expected British GDP to grow by 7.8 per cent this year, “above our expectations for the US”, which it estimates will increase by 7.2 per cent. If you consider that this is despite the US injecting a brain-bending $1.9 trillion stimulus into its economy, making their Dad much bigger even than our own Rishi's, it is an incredible number.

Independent economists cannot get their upgrades in fast enough, when it comes to describing the UK's projected growth in 2021. You may recall that the International Monetary Fund had previously said that Britain could not expect to return to pre-pandemic levels of growth until 2022. However, that was based upon the previous predicted growth rate of 5.3 per cent. Just one month later, with figures from March already immersed in dust in our rear-view mirrors, we are outperforming that prediction by staggering numbers.

Just like British people sitting on a bench on the wind-swept front at Weston-Super-Mare in March eating ice-cream cornets whilst their legs go blue, our economy is showing massive resilience. The success of our own vaccination programme has been luring people from behind their banged saucepan lids, tempted to spend the £150 billion in 'accidental savings' (economists' words), with retail sales and business activity being much better than expected since the economy started to reopen.

In another set of data the EY Item Club, a forecaster that uses the same economic model as the Treasury, upgraded its GDP growth forecast for this year from 5 per cent to 6.8 per cent. A separate consumer tracker produced by Deloitte showed that every measure of consumer confidence had increased and that the UK was “primed for a sharp snapback in consumer activity”.

Unlike that Weston-Super-Mare cornet, Boris doesn't think we have Covid "entirely licked" yet, but things have (quite literally) never looked economically brighter.

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