The Bank of England Bank of England warned on May 7 local time that the British economy is moving towards the worst recession ever.
The Bank of England ’s latest monetary policy report states that the New Crown Outbreak is “significantly reducing the work and income of the British”. Even if the deregulation measures are relaxed in June, the impact of the new crown epidemic means that the economy will shrink by 14% this year, which will be the largest annual decline since 1949.
This report states that the British economy has fallen into its first recession in more than a decade. The economy shrank by 3% in the first quarter of 2020, and in the three months to June, the economy experienced a 25% decline. The real estate market has stalled, and consumer spending has fallen by 30% in recent weeks. The unemployment rate is expected to rise from the current 4% to more than 9% this year. Although the UK’s economic growth is expected to rebound to 15% in 2021, the scale of the economy will not return to its peak before the virus outbreak by the middle of next year.
Bank of England Governor Andrew Bailey said the economy will not return to normal soon. He said that this economic downturn is “unprecedented”, even if the social isolation measures are lifted, consumers will remain cautious. Only next summer will people’s activities be fully restored. Bailey also said that he expects the permanent damage caused by the new crown epidemic will be “relatively small” and the rate of economic recovery “may be much faster than the recovery of the global financial crisis.”
On that day, the Bank of England ’s Monetary Policy Committee unanimously voted to maintain interest rates at a historical low of 0.1%.
(Originally titled “The Bank of England warns that the UK is entering the worst economic recession ever”)