The Bank of England (BOE) has said it will inject £150 billion into its economy in an attempt to ease the UK into a second lockdown.
For the last three months of the year, the BOE says it expects the economy to shrink to 2%, but will bounce back into the New Year, assuming restrictions have been eased.
The BOE stated:
“Covid-related developments put a strain on short-term spending than expected in the August report, resulting in a decline in GDP in the fourth quarter of 2020.”
The Bank of England has also commented on employment. It said it is expected that unemployment rates will peak at its current 4.5% in the second quarter of 2021.
In today’s report, BOE stated: “In the central projection of the MPC, GDP will not exceed that level in the fourth quarter of 2019 until the first quarter of 2022. As a result, unemployment rates will increase.
“Unemployment is projected to peak at around 7¾% in the second quarter of 2021. After that, GDP will gradually decrease during the forecast period as it recovers.”
The BOE expects the UK economy to shrink by 11% this year, commenting: A five-level restriction system announced by the Scottish government that appeared on November 2nd. The Wales fire blockade is expected to end on November 9th in just over two weeks. Four-week additional restrictions in Northern Ireland ending on November 13th.
“We are expected to loosen the restrictions a little since then. The average limit level we had won in mid-October is in effect and is expected to continue until the end of the first quarter of 2021.”
