London — According to a new forecast of the Bank of England (Bank of England), the UK economy is on the verge of the worst crisis in more than 300 years because of the pandemic coronavirus.
The Central Bank said on Thursday that the British economy could shrink by 14% this year. It will be the largest annual decline since 1706, based on the best assessment of the historical data Bank.
The Governor of the Bank of England Andrew Bailey (Andrew Bailey) said that the Bank will take measures, appropriate to support the economy on the background of the development of the pandemic coronavirus.,However, he has not announced any new stimulus measures.
In the report, which examined the impact of the pandemic, the Bank of England noted that GDP fell by 3% in the first quarter of this year and will fall by as much as 25% in the second quarter. That is, the economy will be less by about 30% compared to the end of 2019. It is expected that unemployment will increase to 9%.
The Central Bank cut interest rates to a record low in March and has launched a programme to purchase bonds worth 200 billion pounds ($248 billion), which is designed to withstand the economic shock caused by the injunction for weeks. Most likely, in the coming months, additional measures will be taken. Two members of the Committee on monetary policy voted for the infusion another 100 billion pounds ($124 billion) in a stimulus program, and third-party economists expect that other members of the Committee agree, as soon as the situation becomes clearer.
The Central Bank expects a rapid economic recovery next year, but he cautioned that a lot depends on how the pandemic will evolve. If the coronavirus continues to spread and the government will have to extend or re-impose restrictions, it will take much more than 100 billion pounds.
“Ultimately, the Bank can go much further [accepted action],” say the researchers from Capital Economics.