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.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now
We welcome comments that add value to the discussion. We attempt to block comments that use offensive language or appear to be spam, and our editors frequently review the comments to ensure they are appropriate. If you see a comment that you believe is inappropriate to the discussion, you can bring it to our attention by using the report abuse links. As the comments are written and submitted by visitors of the Telecompaper website, they in no way represent the opinion of Telecompaper.