The Bank of England says the UK faces its worst slump in 300 years, but on Thursday held off from any moves on rates or bond buying.
Julian Satterthwaite reports.
Britain is in its seventh week of lockdown, and battling the world’s second worst virus death toll.
There’s a deep gloom over the economy too, and now the Bank of England is weighing up the damage.
On Thursday (May 7) the central bank warned of the country’s worst slump in 300 years.
It forecasts a 25% fall in economic output in the April-June quarter, with unemployment doubling to 9%.
Over the full year it sees GDP down by 14%, but with a 15% bounce back in 2021.
Policymakers said such unprecedented turmoil would require major monetary and fiscal stimulus.
But for now they’re holding off on new measures.
Thursday saw rates left on hold at a record-low 0.1%.
Bond buying targets were also unchanged.
However, many economists predict that will soon change.
The bank is buying government debt at a furious pace, and will soon burn through the extra 200 billion pounds it gave itself in March.
Sterling gained as much as half a percent against the dollar following the decision to leave policy unchanged.
Bank of England Governor Andrew Bailey expects the worst economic recession since 1706 - but a quick rebound in 2021.
