The UK is facing the most severe recession since the downturn endured by the country after the First World War, according to the Bank of England (BoE).
But the good news is that it is not as bad as the BoE’s earlier prediction, a few months ago, which forecast the worst slump in more than 300 years.
The BoE said this week that it expected the employment crisis and economic downturn caused by reaction to the COVID-19 pandemic will not be quite as bad as it previously feared.
But the economy will recover more slowly than hoped, the BoE warned, with around 1.2 million workers still facing losing their jobs.
The BoE now expects the economy to contract by a fifth in the second quarter between April – the first full month of lockdown – and the end of June.
The recovery had been “earlier and more rapid” than it had assumed in May, the BoE said, as the lockdown eased more quickly than anticipated and household spending, fuelled by a boom in online shopping, had risen sharply.