The UK will enjoy its strongest year of growth since modern records began in 1948 as the economy surges back to life after a rapid vaccine rollout, the boss of Barclays has predicted.
Jes Staley said he expects the UK to have a very robust recovery alongside the US, posting its biggest rebound for decades on the back of a post-lockdown consumer spending spree.
He said: “Our economic forecast is for the UK economy to grow by 6.5pc this year, which would be the strongest growth rate in the British economy since 1948.
“There’s tremendous pent-up demand, both with the consumer and small businesses, and we see that as a result of the vaccination programme, which has been an extraordinary success in the UK.”
It came as Barclays unveiled pre-tax profits of £2.4bn for the first quarter of the 2021, their highest level in 13 years.
The robust performance was driven by strong growth in its corporate and investment banking division and bumper mortgage lending after house prices took off following Chancellor Rishi Sunak’s stamp duty cut.
Barclays’ share trading floor beat forecasts in the first quarter during a period of wild swings on the stock market, despite a weaker performance elsewhere in the bank’s markets division.
Mr Staley said: “As we enter the next phase of this pandemic, we remain resolute in our commitment to support the economic recovery.
“From our spend data, which captures UK economic activity across our cards and acquiring businesses, we are already seeing encouraging early signs of recovery in some sectors, including those hit hardest by the crisis.”
Mr Staley added that the bank will start bringing more staff back to its offices in Canary Wharf and New York from June amid growing pressure for a return to the office. He said the bank is likely to be more flexible than US rivals such as Goldman Sachs and JP Morgan, which are keen for a full return to old working patterns, but Barclays is expecting large numbers of workers to return.
Speaking to Bloomberg, he said: “I don’t think you’ll see a strict mandate from Barclays saying you have to be in from this day to that day. The pandemic has taught us we can be quite flexible.
“I think many [staff] would like to come back into the office to reconnect. That physical presence is important for people.”
The bank’s high street division had a mixed period as lockdowns reduced consumer spending, but the stamp duty holiday continued to help the housing market and its mortgage sales.
Provisions for bad loans were also significantly reduced as the economy improved and the post-pandemic outlook appeared more stable compared with a year ago.
The charges for the quarter were just £100m compared with £2.1bn a year ago, although Barclays said it would not yet release cash previously set aside in contrast to rivals NatWest and Lloyds.
Shares fell 4.7pc to 179.9p in morning trading.