The Bank's scenario showed the UK economy plunging into its first recession in more than a decade, according to BBC. In this scenario, the economy shrinks by 3% in the first quarter of 2020, followed by a 25% decline in the next three months to June. This would push the UK into a technical recession, defined as two consecutive quarters of economic decline.
UK’s central bank declared that the economy was on course to diminish 14% in 2020, based on social distancing measures being gradually phased out between June and September 2020. Policymakers voted unanimously to keep interest rates at 0.1%.
While UK growth is expected to rebound in 2021 to 15%, the size of the economy is not expected to get back to its pre-virus peak until the middle of 2021. However, the Bank expects no lasting damage from the pandemic, with the economy, employment, and earnings gradually returning to pre-virus growth rates.
The Bank warns that this is not a typical forecast and that ‘many other scenarios are plausible’, according to bbc.com.
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