September 23, 2020

Bank of England warns of sharpest recession on record

The Bank of England has warned that the UK economy is heading towards its sharpest recession on record.

The coronavirus impact would see the economy shrink 14% this year, based on the lockdown being relaxed in June.

Scenarios drawn up by the Bank to illustrate the economic impact said Covid-19 was “dramatically reducing jobs and incomes in the UK”.

Bank governor Andrew Bailey told the BBC there would be no quick return to normality.

He described the downturn as “unprecedented”, and said consumers would remain cautious even when lockdown restrictions are lifted.

Mr Bailey said: “Not all of the economic activity comes back. There’s quite a sharp recovery. But we’ve also factored that people will be cautious of their own choice.

“They don’t re-engage fully, and so it’s really only until next summer that activity comes fully back.”

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