Economic outlook for 2022: it’s all about covid and inflation

When it comes to the outlook for 2022 it would be easiest at this point to just give you the consensus forecasts. The Treasury surveyed independent forecasters just before Christmas and the average of new forecasts – those compiled since the omicron covid variant emerged – was that the recovery will continue and that the economy will show strong growth in 2022.

Forecasters predict 4.7% growth for this year following 7% in 2021. In normal times 4.7% growth would represent a boom a growth rate rarely achieved though it is part of the bounce from the slump of 2020. Forecasters expect current high inflation to subside to 3.1% by the end of the year...