BUSINESS CLOSE: Britain facing record economic slump BoE warns

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BUSINESS CLOSE: BoE says slump won’t be as bad as feared as it keeps rates on hold at 0.1%; Construction sees strong pick-up; pound at $1.32

By Jane Denton For Thisismoney

Published: | Updated:

London markets tumbled today, with the FTSE 100 closing 1.3 per cent lower at 6,026 and the FTSE 250 falling 0.9 per cent to 17,479.

The Bank of England has warned that Britain is facing a record economic slump as a result of Covid-19, but has eased up on its gloomy predictions for this year.

Andrew Bailey and the rest of the Bank’s monetary policy committee think the UK’s economy now looks set to shrink by 9.5 per cent this year. 

While this is an improvement on the 14 per cent drop predicted in May, it would still signal the worst economic performance for 99 years. 

The MPC said its central projection forecasts that GDP will continue to recover in the near-term, but is not expected to exceed its levels from the end of last year until at least the end of 2021.   

As expected, interest rates have been kept on hold at 0.1 per cent, spelling more bad news for hard-pressed savers. 

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