A Bank of England scenario sees UK GDP falling 14% this year and the jobless rate hitting 8% as the coronavirus crisis ravages the economy.
The Bank released its first work on the impact of the lockdown measures to limit the spread of COVID-19 as its monetary policy committee left interest rates unchanged at their emergency level of 0.1%.
However, two members voted in support of more bond-buying – indicating they felt more support was needed beyond the £645bn of asset purchases, also known as quantitative easing, already targeted by the Bank to boost liquidity.
At the same time, it released what it called an "illustrative scenario" based on the assumption of a gradual easing of the UK lockdown.
It said the expectation of a 14% decline in economic growth this year was also dependent on significant support from both the Bank and government.
Official figures next week are expected to confirm negative growth for the first three months of the year.
The Bank's projection included a 25% decline in GDP in the second quarter.
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But the Bank saw a rapid recovery from the slump ahead – with GDP surging by 15% next year.
It said: "The spread of COVID-19 and the measures to contain it are having a significanRead More – Source