The UK’s economic recovery this year could be stronger than most experts predict, the chairman of a leading bank has said.
William Vereker, who chairs the UK arm of Spanish banking group Santander, said a return of business investment and consumers unleashing savings will drive growth.
He believes the Brexit deal along with the roll-out of vaccines could lead to a stronger than expected bounce-back this year. He expects a ‘big uptick’ in consumer spending and increased business investment. ‘I am a great believer in being an optimist,’ he said.
Setting sail: William Vereker believes the Brexit deal along with the roll-out of vaccines could lead to a stronger than expected bounce-back this year
‘There have been so many negative predictions. But there is another possibility: things might be okay.’
Mr Vereker took over as chairman of Santander UK last year after a long career in finance. He was also business envoy for Theresa May.
The economy shrank by 2.6 per cent in November, meaning output was 8.5 per cent below its pre-pandemic peak. That was better than many had foreseen but more financial agony is expected in the short term.
Mr Vereker outlined why he is optimistic. ‘There is significant pent-up consumer demand and savings which will flow into the economy later this year so I can see a quick bounce-back.
‘Second, I am optimistic about business investment.’
He said this had been ‘anaemic’ due to uncertainty over Brexit and the pandemic. ‘Now, however, you are going to have a much clearer framework in which to make investments because the Brexit deal is going to remove a big element of uncertainty and I would also expect the Covid situation to improve.’
He added that there will be a ‘reassessment of the UK as a place to invest and do business,’ if the Government gets its policy framework right.
‘I am optimistic because of the combination of those three things, and a fourth. That is, on a relative basis, the UK looks good in terms of the opportunity to invest, employ and develop businesses,’ he said.
‘We still have pretty flexible labour laws, the English language, excellent education and a strong legal system.
‘These are competitive advantages which have meant capital and talent have gravitated to the UK over 30 years. I can see sterling strengthening and the economy growing faster than forecast.’
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