United Kingdom country-specific exchange traded funds are rallying as Britain’s economy reopens and tries to recover from the Covid-19 pandemic.
The iShares MSCI United Kingdom ETF (NYSEArca: EWU) has increased 15.8% year-to-date and advanced 26.8% over the past year, trading above its pre-pandemic levels.
Bank of England Deputy Governor Jon Cunliffe said on Friday that the U.K. is enjoying a strong economic rebound as COVID restrictions lift, but pubs and restaurants are still recovering faster than town-center retail segments, Reuters reports.
“What we’re seeing is a strong bounce back of activity,” Cunliffe told BBC Radio Suffolk.
“People have accumulated a lot of savings, they’re going out and they’re spending, particularly in those areas we couldn’t go out in the last year or so,” he added.
The U.K. economy’s recovery from the pandemic could be stronger than previously anticipated. The Organization for Economic Co-operation and Development projected that U.K. is likely to expand by 7.2% in 2021, an upgrade from its previous March projection of 5.1%. The new growth estimates are also set to be the fastest among the large rich countries, according to the OECD.
The OECD also raised its expectations on global growth to 5.8%, compared to the 4.2% it previously predicted in December.
U.K. Chancellor Rishi Sunak has attributed the improved forecast to the country’s successful Covid-19 vaccine rollout, along with the government’s plan for jobs. However, he warned that with debt at almost 100% of GDP, there was a need to “ensure public finances remain on a sure footing.”
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