DANIEL LEAL-OLIVAS/AGENCE FRANCE-PRESSE/GETTY IMAGES
The Bank of England expects the U.K. economy to shrink by around 25% in the second quarter as the economy reels from the effects of the new coronavirus.
The U.K. central bank agreed at its May meeting to leave the benchmark interest rate unchanged at 0.1% and the size of its bond-buying program at £645 billion ($796 billion).
Britain now has the highest death toll in Europe linked to Covid-19, with 30,076 confirmed fatalities.
The bank said the outlook for the next few quarters is highly uncertain. It expects the economy to shrink in the first and second quarters, unemployment to rise to 9% and inflation to slow markedly. The predicted collapse is similar to the sharp contractions expected in the eurozone and the U.S.
The bank expects a gradual recovery in the second half of the year as businesses reopen and people return to work, though the economy won’t recover all the ground lost to Covid-19 until next year.
