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UK economy could bounce back stronger than forecast following COVID-19 vaccine announcement

12 11 20 UK economy could bounce back stronger than forecast hero

Following the Office for National Statistics’ announcement that the UK economy grew by 15.5% q/q in the third quarter, Colliers International’s UK deputy chief economist Oliver Kolodseike has made the below observations.

“While the headline figures look very impressive at a first glance, we must not forget that GDP fell at a record rate of 19.8% q/q in Q2 and the size of the economy is expected to remain below its pre-coronavirus level until 2022. Growth in the third quarter can be attributed to the re-opening of non-essential businesses and August’s Eat Out to Help Out scheme, with output in the accommodation and food services sector rising more than five-fold in the three months to September.

“While business survey data was positive in October, the renewed national lockdown measures introduced across the four nations in October and November pose a threat to the Q4 GDP figures, which we believe, have a very high chance of being negative. This does not mean that the UK will enter what many call a double-dip recession though, as growth is likely to resume in Q1 2021.

“Given the triple whammy of the US election results, the potential of a vaccine and the strong possibility of a Brexit deal being reached, for the first time since the start of the pandemic, we now believe that risks to the economic outlook are tilted to the upside. We may therefore see even stronger 2021 growth than most forecasters are currently predicting – which the Bank of England will also welcome after their recent announcement of an additional £150billion of quantitative easing.

“Financial markets have responded well to the US election and COVID-19 vaccine news which will of course be welcome news to investors. Since the end of the first lockdown the commercial property market has seen a pick-up in investment activity and we believe that momentum will continue with the typical end-of year surge. Investor interest for prime office assets, supermarkets, logistics and PRS schemes will remain particularly strong. Given the high degree of economic uncertainty we have experienced throughout most of 2020, it would be a good result if commercial property investment volumes reach £45billion by the end of the year, which would be down by only 15 per cent on 2019 results.”

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Oliver Kolodseike

Director of Economics and Research

Research and Forecasting

London - West End

Oliver is Head of Economic Research and leads the quarterly UK forecasting process including the publication of Colliers' Real Estate Investment Forecasts (REIF) report. He also  authors the monthly Property Snapshot and, quarterly Scotland Snapshot. Prior to joining Colliers, he worked for the Centre for Economics and Business Research and IHS Markit. Oliver holds a BA in Economics from  Georg-August University Göttingen (Germany) and an MSc in Economics from Exeter University.

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Kim Inam

PR Manager

Marketing & Communications

London - West End

I'm a communications professional who has previously worked as a journalist for eight years covering a broad range of topics including politics, crime, health and housing in north London. In recent years I have worked in corporate communications for local authorities across London  and joined Colliers in October 2019, initially providing maternity leave cover.

I provide strategic public relations advice to various business lines within the UK organisation to secure recognition for their work in the property press as well as key target media, and work with our experts to produce thought leadership pieces which are of interest to our clients and colleagues within the commercial real estate sector. In addition, alongside colleagues in the PR and wider communications team, I provide media and social media training for our in-house experts to prepare them for media opportunities and raise their personal brand within the sector.

As well as supporting various teams within the UK business, I also I curate and edit regular content for the blog, which drives credible business leads to our experts.


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