Bank of England warns UK economy could shrink 14% in 2020 amid Covid-19 downturn – business live | Business

The Bank of England postponed other stimulus measures, but said it was ready to take further steps to combat the coronavirus attack, which could cause the country's biggest economic downturn in more than 300 years in 2020, before a recovery in 2021.

The BoE said its Monetary Policy Committee kept the Bank's Rate at its lowest level ever, 0.1%, and left its target of buying bonds, mostly British government debt, at £ 645 billion .


However, two of its nine policymakers – Michael Saunders and Jonathan Haskel – voted for another $ 100 billion in firepower when buying bonds.

In what it called an illustrative scenario, the BoE said it saw a 14% drop in Britain's economy in 2020, followed by a 15% recovery in 2021.

This scenario would require very significant monetary and fiscal stimuli, he said.


Many economists expect the BoE to increase its asset purchase program next month, before the extra 200 billion pounds it donated in March are depleted by the furious pace of its purchase of British government debt.

"As the economic outlook evolves, the Bank will act as needed to provide the monetary and financial stability essential for long-term prosperity and to meet the needs of the people of this country," said Governor Andrew Bailey.


"This is our total and unwavering commitment."

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