The UK economy is heading for its worst recession in 300 years

• 2020-05-09
• Traiding Idea

The UK economy is heading for its worst recession in 300 years

The Bank of England said in its latest forecast that the UK economy is heading for the worst recession in 300 years due to the coronavirus outbreak.

The central bank said the country's economy could shrink by 14 % this year, the biggest annual contraction since a decline of 15% in 1706.

The head of the Bank of England, Andrew Bailey, said he would take steps to support the economy amid coronavirus outbreak, but did not announce any new stimulus measures.

In a report examining the impact of the Coronavirus pandemic, the Bank of England said that gross domestic product ( GDP ) fell by 3% in the first quarter of this year compared to the previous year and would fall by another 25% in the second quarter. In this way, the economy will be 30% smaller than at the end of 2019. Unemployment is expected to rise by 9 %. The central bank expects an economic boom in 2021.

"Current conditions are unprecedented in our lifetime, and all forecasters are struggling to make out where the economy stands now, never mind what happens in the future. But it is clear that the next few months are going to produce some of the biggest output falls on record," said Commerzbank economist.

There are more than 200,000 confirmed cases of coronavirus in Britain, and more than 30,000 people have died from the disease.

The British government has been preparing to ease social distance restrictions since late March, but the decision has not yet been made.

Some European countries have taken steps to reopen their economies. EU officials have described the Coronavirus pandemic as the worst economic shock since the Great Depression.

The European Commission warned this week that the EU economy would shrink by 7.5 % this year, and that drop would be even more precipitous across the 19 countries that use the euro.