Wednesday 08th July 2020
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Economic forecasts downgraded as firms urged to prepare for ‘new normal'

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A key forecasting group has downgraded its prediction for how fast the economy will shrink this year and warned that businesses in the region will need to respond to long term-shifts in the economy which have been accelerated by the pandemic. The latest EY ITEM Club forecast is that UK gdp will fall by 8% in 2020, down from the 6.8% which it was predicting in April. However it does expect the economy to grow by 5.6% in 2021, up from an earlier forecast of 4.5%.

Stuart Wilkinson, office managing partner at EY in the East of England, said: “The East of England has a varied economy, known as much for its strength in pharma-industries as it is for its agricultural landscape. Businesses in the region operating in food manufacture, processing and production have faced different types of challenges as a result of the Covid-19 pandemic, including managing their supply chains and for some increasing  their required workforce, alongside restrictions. Technology has played an important role in supporting these businesses during this time, and it is likely to play an ever-increasing part as they evolve in the next 6-12 months.”

He added: “Businesses will not only need to respond to the short-term impact of Covid-19, but also the long-term shifts in the economy, accelerated by the pandemic. The ‘new normal’ will be different to what’s gone before, and with so much government support in the economy, it will also be important for the private sector to align itself with government initiatives.”