How will the vaccine program help the UK economy to bounce back?

Business Insights

It is nearly a year since Prime Minister Boris Johnson announced the UK’s first national lockdown in response to the coronavirus pandemic, ordering the temporary closure of all non-essential high street businesses in an effort to gain control of the disease.

Ever since then, the crisis has consistently caused disruption for thousands of firms, with the economy having suffered its biggest slump on record between April and June, pushing the country into recession.

The effectiveness of the Government’s vaccine rollout operation, however, has offered fresh hopes to an ailing economy, with the Bank of England now forecasting that the programme’s continued success will allow the UK to bounce back strongly in 2021.

But how exactly can vaccines help the UK to start rebuilding its economy after a period of such intense financial hardship?

Household spending

A key part of the Bank of England’s forecast for the economy revolves around the vaccination programme’s support for ‘a material recovery in household spending’.

After months of lockdowns and social distancing measures, consumers have been forced to shop differently, and this has involved a reappraisal of what items are deemed essential, as well as an increasing shift from high street to online shopping,

With the vaccine programme having got off to such a strong start and a return to normality on the horizon, consumer confidence grew by five points in February 2021 on GfK’s Consumer Confidence Index to reach -23.

Furthermore, the part of the index that measures how people feel about their financial situation over the next 12 months moved further into positive territory, from a score of two in January to four in February.

These figures give a clear indication that the rollout of the vaccines is providing consumers with greater spending confidence, making them more likely to spend now that a provisional end to restrictions is in sight.

Further to this, Chancellor Rishi Sunak has now unveiled a £5 billion scheme for high street shops and hospitality firms in England, with the promise of further support on the way, that it is hoped will give a much-needed shot in the arm to traditional retail and entice consumers back into stores, pubs and restaurants.


The pandemic has had a devastating impact on the UK jobs market, as thousands of businesses have been forced to shutter, with workers being laid off in their millions as a result.

The most recent unemployment rate from the Office for National Statistics – for October to December 2020 – was 5.1%; the highest figure in five years.

Though many economists expect the unemployment rate to continue to rise in the short term, there is a general consensus that the vaccine rollout will help to limit the number of people who will lose their job because of the crisis.

According to the latest UK jobs report from the Recruitment & Employment Confederation and KPMG, optimism around the vaccine rollout has caused temporary job placements to grow by their fastest pace since October 2018, while permanent appointments have risen for the first time since September 2020.

As people continue to be vaccinated at such a rapid pace, the prospect of staff returning to their usual places of work soon increases, and there is a distinct demand among business owners for workers to replace those they may have been forced to lay off already.

The optimism surrounding employment that the vaccine rollout has created has also been strengthened by the Chancellor’s Budget announcement that the furlough scheme will be extended until the end of September, thereby minimising the amount of people who will lose their jobs as a result of the pandemic.


Following a period of such unprecedented economic turbulence, the emergence of effective vaccines and their rollout to the population has been a light in the dark for the UK’s many struggling firms.

Now that Boris Johnson has set out his roadmap for easing restrictions in response to the vaccine programme’s success, it is evident that financial confidence among consumers and businesses alike is far greater than it was at the height of the pandemic, with spending and recruitment set to soar as the year goes on.

Though we are still very much in the early days of the vaccine rollout – and we are not yet out of the woods as far as infections and hospitalisations are concerned – it is perfectly understandable why so many people are beginning to believe that brighter times are ahead for the economy in 2021.

Michael Foote, Director of cost comparison site, Quote Goat