UK economy to shrink the most since 1706

British economy could be 30% smaller at the end of the first half of this year, but would recover in second half as lockdown restrictions are lifted and policies take effect.

By

World News

May 7, 2020 - 9:35 AM

LONDON (AP) — The Bank of England warned Thursday that the British economy could suffer its deepest annual contraction in more than three centuries as a result of the coronavirus pandemic, before roaring back next year.

In what it describes as a “plausible” scenario, the bank said the British economy will be 30% smaller at the end of the first half of the year than it was at the start of it, with the second quarter seeing a 25% slump alone following a 3% decline in the first.

Unemployment is projected to more than double to around 9%, but that figure does not include the 6 million workers who have been retained by firms as part of a scheme that sees the government pay up to 80% of salaries. Many of those people furloughed may end up losing their jobs if the economy fails to recover as anticipated or the government starts withdrawing its support too soon.

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