Britain's economy is shrinking at its fastest pace in centuries as the devastation wrought by the coronavirus pandemic saps demand, but it's likely to bounce back to growth next quarter as more businesses reopen, a Reuters poll found.
LONDON - Britain’s economy is shrinking at its fastest pace in centuries as the devastation wrought by the coronavirus pandemic saps demand, but it’s likely to bounce back to growth next quarter as more businesses reopen, a Reuters poll found.
The coronavirus has infected around 9.3 million people globally and Britain has the highest related death toll in Europe, despite a government-imposed lockdown that forced businesses to close their doors and citizens to stay home. “April was undoubtedly the low point in activity. We’ll probably see a more pronounced rebound during the third quarter as a broader range of businesses are expected to reopen,” said James Smith at ING.
To support the economy, the Bank of England has cut its key interest rate to a record low of 0.10% and restarted asset purchases, or quantitative easing . Last week, it bolstered its firepower by a further 100 billion pounds . “The MPC won’t decide on more until November or December. By that point, we suspect Haldane’s hopes will have been dashed, unemployment will be much higher, and inflation will still be well below the 2% target,” said Andrew Wishart at Capital Economics.
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