Britain is to drop restrictions for fully vaccinated people and reopen its borders to European and American travellers from next month.

Boris Johnson has decided that, from August 16, those who have been fully vaccinated will not be required to take a test if they come into contact with someone with Covid, unless they have symptoms.

It had previously been reported that workers would only be released from self-isolation after a negative test, and health officials had been planning for a major new system of compulsory testing to free people from isolating.

With Covid cases falling for a seventh successive day, Mr Johnson has also decided to reopen the country to foreign tourists from the EU and North America who have been fully vaccinated. Travel to the UK was previously only possible without quarantine from a handful of green list countries.

It is understood that Rishi Sunak, the Chancellor, and other ministers had argued that the costs of stopping inward tourism and business trips was harming the British economy at a time when most of Europe has reopened.

The decision to loosen rules came on the Prime Minister’s first day back at work in Downing Street following his self-isolation after coming into contact with Sajid Javid, the Health Secretary, who had tested positive for Covid.

Over the past fortnight, Mr Johnson has faced mounting criticism from business leaders over the growing economic costs of the "pingdemic", which has led to hundreds of thousands of vaccinated workers being forced to self-isolate.

The Government – which has seen its lead in the opinion polls slip – had been warned that Britain’s economic recovery was at risk of being derailed unless ministers stepped in to stem the growing chaos. 

But on Tuesday, the International Monetary Fund predicted that the UK’s economy will grow faster than any major economy in Europe as it rebounds from the Covid recession.

On the same day, 23,511 new Covid cases were logged in the UK, meaning numbers in Britain have now fallen below France, which registered 26,871.

Despite a rise in deaths to 131, the week-long fall in cases – the first time Covid infections have consistently dropped during the pandemic outside lockdowns – has led to cautious optimism among ministers and scientists.

Prof Neil Ferguson, a prominent member of the Scientific Advisory Group for Emergencies (Sage), said he was unsure whether his prediction of 100,000 daily cases would now come to pass.

"We’re not completely out of the woods, but the equation has fundamentally changed. The effect of vaccines is hugely reducing the risk of hospitalisations and death," Prof Ferguson told the BBC.

"And I’m positive that, by late September or October time, we will be looking back at most of the pandemic. We will have Covid with us, we will still have people dying from Covid, but we’ll have put the bulk of the pandemic behind us."

Mr Johnson, visiting a police station in Guildford, struck a cautious note when asked about falling Covid cases.

"It is very, very important that we don’t allow ourselves to run away with premature conclusions about this," he said.

But there were signs that he is determined to push ahead with lifting some of the remaining restrictions later in the summer. Changes to the self-isolation rules to ease the pingdemic are due to come into effect on August 16, less than three weeks away.

Mr Johnson has resisted pressure from some of his own ministers – most recently expressed privately at a Covid-O Cabinet committee meeting on Monday – to bring forward the date. But senior Whitehall sources have indicated that he has settled on a lenient definition of the new rules for self-isolation.

Currently, people who are pinged – alerted by the NHS Covid app to having contact with someone who has Covid – must quarantine for 10 days even if double jabbed, barring a few exemptions. This is legally mandated if the alert comes from NHS Test and Trace and advised if the notification comes from the app.

More than a million 'pinged' since start of July

Under the new rules, people who have had both doses of a Covid vaccine and waited two weeks for them to take effect will be urged to get a PCR test once pinged instead of self-isolating.

However, they will not be legally required to get the test – it will be "advisory". Nor will those who choose to get a test have to self-isolate as they await the result.

The new rules reflect Mr Johnson’s drive to put the emphasis of following virus rules on personal responsibility rather than legal enforcement.

It means the 70 per cent of UK adults who have been double jabbed will be able to make their own choice about whether to self-isolate once alerted in a boost to businesses that have been crippled by enforced quarantine.

Government messaging will encourage people to take a test after being pinged, and people with virus symptoms will also have to self-isolate and take a test. Those who have only had a single jab or not been vaccinated at all will also still be required to self-isolate for 10 days, as under the current rules.

Meanwhile, fully vaccinated EU and US citizens will be allowed to enter the UK without having to quarantine from next month under plans expected to be approved by ministers on Wednesday.

It follows a trial by Heathrow, BA and Virgin which found the practical difficulties of verifying the vaccination status of travellers was overcome in 99 per cent of cases amid concerns over the complexities of different US states’ paper and digital certificates. The results have been submitted to the Government.

Ministers are also expected to confirm that double vaccinated expats will be able to travel to the UK from amber countries without self-isolating. The current exemptions from quarantine for fully jabbed travellers from amber list countries only cover Britons who have been vaccinated by the NHS.

Ministers will also consider plans to allow travellers who transit through red list country hubs including Dubai, Abu Dhabi, Doha, Istanbul and Bahrain to avoid hotel quarantine provided they remain airside when they make their connections. At present, they are not exempt.