Brexit Britain surges back! UK economy to grow by huge 7% after Covid, new report predicts

And Chancellor Rishi Sunak has hailed the analysis, which must be viewed against a backdrop of the UK’s rapid coronavirus vaccine deployment. The International Monetary Fund’s (IMF) prediction for UK economic output is significantly higher than the 5.3 percent growth which its economists had predicted in April.

Mr Sunak said: “There are positive signs that our economy is rebounding faster than initially expected, with the IMF forecasting the UK to have the joint highest growth rate in 2021 among the G7 economies.”

The UK’s dramatic economic growth this year is likely to be in part because it had so far to bounce back from last year’s fall.

Of all the G7 nations, the UK was the worst hit in 2020, with output dipping 9.8 percent.

This year’s seven percent increase puts the UK neck and neck with the US – but the American economy merely shrank by 3.5 percent last year, suffering far less than Britain.

Economists also downgraded their growth predictions for next year by 0.3 percent to 4.8 percent.

Mr Sunak added: “We still face challenges ahead as a result of the impact of the pandemic, which is why we remain focused on protecting and creating as many jobs as possible through our Plan for Jobs.”

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The IMF’s World Economic Outlook also highlighted a widening gap between richer and poorer countries as they look to recover from the pandemic.

Gita Gopinath, the IMF’s chief economist, said: “Growth prospects for advanced economies this year have improved by 0.5 percentage points, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia.”

Advanced economies will see a stronger recovery next year, she predicted.

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The survey also suggested the pandemic with exacerbate global inequality, not least as nearly 40 percent of people in advanced economies have been fully vaccinated, compared with just 11 percent in emerging markets and a “tiny fraction” in low-income developing countries.

Meanwhile, per capita income has dipped just 2.8 percent in advanced economies, compared with 6.3 percent for emerging market and developing economies, excluding China, according to IMF estimates.

The IMF cut its 2021 growth forecast for India, which has struggled with a massive wave of infections this year, by three percent to 9.5 percent.

It also reduced its 2021 forecast for China by 0.3 percent, citing a scaling back of public investment and overall fiscal support.

The IMF also forecast lower prospects for Indonesia, Malaysia, the Philippines, Thailand and Vietnam where recent waves of COVID-19 infections are weighing on activity.

As a whole, Asia is tipped to see growth of 7.5 percent this year, down 1.1 percent from the April forecast.

Low-income countries saw a downgrade of 0.4 percent in their 2021 growth, with the IMF blaming the slow rollout of vaccines as the main factor impeding their recovery.

The IMF said downside risks remain significant globally, including the potential for new, highly contagious coronavirus variants to lead to new restrictions on movement and reduced economic activity.

In one scenario affecting both emerging markets and advanced countries with high vaccine hesitancy, the Fund said 0.8 percent could be shaved from global GDP growth this year and in 2022.

Almost 55 percent of Britons have been double-jabbed, compared with less than 47 percent in the European Union, according to the Our World In Data website.