The Bank of England anticipates the UK economy is already in a sharp recession, having contracted by a significant 3% in the first three months of the year and then an unprecedented 25% in the current quarter ending in June, in its scenario published on Thursday.
In its Monetary Policy Report, the most significant and thorough look at the economy since the onset of the coronavirus pandemic, the unemployment rate is expected to double to around 9%. The economic scenario is built on assumptions that the lockdown in the UK and the rest of the world is gradually lifted from early next month over a period of four months.
While there should be a bounce back in growth later this year, the Bank’s “illustrative scenario” anticipates that this will largely come next year, with the economy this year suffering a record fall of 14%, and then growing by 15% next year.
The Bank warns that this is not a typical forecast and that “many other scenarios are plausible”. But these numbers provide the sharpest analysis yet of the economic challenge of the virus and its pandemic.
Source:Â bbc.com