The Bank of England has made this dire prediction.
Source:
The Bank of England (BoE), the central bank tasked with overseeing monetary policy in Britain, is predicting the worst economic recession in over 300 years due to the coronavirus pandemic.
The BoE anticipates output to plunge by a massive 30 percent over the first half of year, which would be the biggest loss of productivity in the nation since 1709’s “great frost.” They do not intend at the present time to embark on another round of stimulus spending but reserve the right to do so in the future.
“For all members of this group, the prospective weakness in employment and inflation, and downside risks around aspects of the medium-term outlook, might necessitate further monetary policy action,” members of the BoE’s Monetary Policy Committee wrote.
They are warning banks that stopping loan creation will result in far more bankruptcies and greater losses on existing loans. Restricting lending, they argue, would only lead to negative long-term ramifications for the global economy and put the banks in danger of permanently shuttering as well.
