UK economy to take slower pace to recovery: Bank of England
The Bank of England said on Thursday that the U.K. economy will take a slower pace to recover as it faces pressing risks including surging unemployment claims and a second wave of coronavirus infections.
The longer-than-expected economic recovery of the UK is anchored to the central bank’s projection of a 9.5% shrink in the GDP rate for this year that if materialized would be the country’s worst fall in a century. However, the figure is less severe compared to the bank’s prediction in May of a 14% slump, which could have been the U.K.’s most disastrous economic fall in 300 years.
Furthermore, the central bank is expecting a slower economic recovery through the end of the year since resuming economic activities in mid-April. The forecasts included an assumed post-Brexit deal with the European Union from January 2021. More so, the bank predicts a 9% GDP growth in 2021.
On another major blow, the Bank of England expects the unemployment rate to hike to 7.5% by the end of the year while the possibility of another wave of coronavirus outbreak in the country also looms.