The Bank of England has predicted the worst economic crash since the Great Frost of 1709. Economists are less optimistic than the central bank about the rate of recovery for the UK economy. “Current conditions are unprecedented in our lifetime and all forecasters are struggling to make out where the economy stands now,” one economist described.
Worst Recession in Over 300 Years
The Bank of England (BOE) has forecasted a devastatingly bleak outlook for the U.K. economy in its most recent monetary policy report published on Thursday ahead of Prime Minister Boris Johnson unveiling the new guidelines for coronavirus lockdown. The central bank’s Monetary Policy Committee (MPC) has “constructed a plausible illustrative economic scenario” to help illustrate the potential impact of the covid‑19 crisis on the British economy. The BOE noted, however, that an unprecedented crisis means the economic outlook is “unusually uncertain,” as it critically depends “on the evolution of the pandemic and how governments, households, businesses and financial markets respond,” the report details.
Based on the bank’s own best estimate and historical data, the coronavirus crisis could push the British economy into the fastest and deepest recession in 300 years, since the huge economic slump of 1706 and the Great Frost of 1709. The U.K. economy could shrink by 14% in 2020, the biggest annual contraction since a decline of 15% in 1706 and 13% in 1709. The overall output is expected to plunge almost 30% in the first half of 2020 — due to a fall of 3% in the first quarter and another 25% drop in the second quarter.
Bank of England Governor Andrew Bailey explained that
