1,000,000 people could lose jobs this year as unemployment hits 7.5%
1,000,000 people could lose jobs this year as unemployment hits 7.5%
The downturn of the British economy may not be as severe as predicted but it could take even longer to recover than previously feared. The Bank of England (BoE) estimates that the economy will shrink by about 9.5% this year due to the coronavirus pandemic – less than the previous estimate of 14%.
It also cautioned that it does not expect the economy to jump back to pre-virus levels until at least ‘the end of 2021’, according to its latest Monetary Policy Report. However, unemployment will jump from the current rate of 3.9% to 7.5% by the end of this year, before slowly declining from the start of next year, added the BoE.
The downturn of the British economy may not be as severe as predicted but it could take even longer to recover than previously feared. The Bank of England (BoE) estimates that the economy will shrink by about 9.5% this year due to the coronavirus pandemic – less than the previous estimate of 14%.
It also cautioned that it does not expect the economy to jump back to pre-virus levels until at least ‘the end of 2021’, according to its latest Monetary Policy Report. However, unemployment will jump from the current rate of 3.9% to 7.5% by the end of this year, before slowly declining from the start of next year, added the BoE.
This is around the equivalent of 1 million Britons losing their jobs. Visit our live blog for the latest updates: Coronavirus news live
The Bank of England predicts the GDP will fall by 9.5%
It estimates that this figure also will not return to the same rate at the end of 2019 until the end of next year. However, it added: ‘The outlook for the UK and global economies remains unusually uncertain.
It will depend critically on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors.’ Experts said that the UK economy shrank by more than 20% in the first half of the year after being hammered by the coronavirus pandemic. The bank revealed its forecasts as it decided to keep rates at a record low of 0.1% after its nine-strong Monetary Policy Committee (MPC) voted unanimously.
The central bank also said it will maintain its current quantitative easing programme at £745 billion.
It estimates that this figure also will not return to the same rate at the end of 2019 until the end of next year. However, it added: ‘The outlook for the UK and global economies remains unusually uncertain. It will depend critically on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors.’
Experts said that the UK economy shrank by more than 20% in the first half of the year after being hammered by the coronavirus pandemic. The bank revealed its forecasts as it decided to keep rates at a record low of 0.1% after its nine-strong Monetary Policy Committee (MPC) voted unanimously. The central bank also said it will maintain its current quantitative easing programme at £745 billion.
The economy shrank by more than 20% in the first half of year (Picture: AFP)
The report offered more positivity by adding that the housing market appears to have returned to ‘close to normal levels’, despite some households experiencing a tightening in credit supply. The report read: ‘UK GDP is expected to have been over 20 per cent lower in 2020 Q2 than in 2019 Q4. ‘But higher-frequency indicators imply that spending has recovered significantly since the trough in activity in April. Payments data suggest that household consumption in July was less than 10 per cent below its level at the start of the year.’
Source:metro.co.uk/