UK - Bank of England sees worst economic slump in 300 years
Friday, 05 08 2020, Category: Economy, Country: United Kingdom
The Bank of England said Britain could be headed for its biggest economic slump in over 300 years due to the coronavirus lockdown and kept the door open on Thursday for more stimulus next month.
In what it called an ‘illustrative scenario’ rather than a standard forecast, the BoE said Britain’s economy might be on course to shrink by 25% in the three months to June and unemployment could more than double to 9% of the workforce.
In 2020 as a whole, output risked shrinking by 14% - the biggest plunge since a ‘Great Frost’ in 1709 - despite the huge stimulus provided so far by the BoE’s rock-bottom interest rates and mammoth bond-buying programme, as well as the government’s 100 billion pound ($124 billion) emergency budget measures.
The central bank’s scenario did, however, include a sharp economic bounce-back in 2021 with growth of 15% if lockdown restrictions are loosened over the coming months.