ASSESSING THE RESILIENCE OF UK’S ECONOMY AFTER THE COVID-19 PANDEMIC AND BREXIT

The objective of the paper is to assess the resilience of UK’s economy towards two economic shocks: the Covid-19 pandemic that hit the global economy in Q4 2019, in years 2020, 2021 and 2022 and the Brexit following the withdrawal of UK from the European Union on 31 January 2020. To assess the resilience of UK’s economy, two sets of forecasts are generated: forecasts using historical data including the pandemic and the Brexit (from Q1 1998 to Q4 2021) and not including the pandemic and the Brexit (from Q1 1998 to Q3 2019). The computation of the difference of their averages is an indicator of the resilience of the economy during the pandemic, the greater the difference the greater the resilience. Eurozone is used as benchmark. By subtracting the average forecasted 2022- 2050 Eurozone quarterly GDP growth rate (annualized) obtained with the Q1 1998-Q4 2021 data, +2.93%, by the one obtained with the Q1 1998-Q3 2019 data, +1.59%, the difference is +1.33%, whereas with UK the difference is -2.33% [-0.24% - (-2.09%)]. Thus, Eurozone shows a greater resilience (+1.33%) than the UK (-2.33%) based on 2022-2050 forecasts. In addition, the authors pointed out that the average of the 2022-2050 quarterly (annualized) growth rate forecasts of the Eurozone is expected to be +2.93% with the 1998-2021 data whereas it is expected to be only -2.09% for UK The Eurozone economy shows better prospectsthan the UK economy.