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FORECASTS FOR THE UK ECONOMY HAVE GOTTEN WORSE
Forecasts for the UK economy have gotten worse. The British people will at least be in 2024 before the pre-epidemic period.
Yazar: Tom Roberts
Yayınlanma: 28 Temmuz 2020 23:40
Güncellenme: 14 Mayıs 2024 12:00
FORECASTS FOR THE UK ECONOMY HAVE GOTTEN WORSE
Forecasts for the UK economy have gotten worse. According to the news in the BBC, British people who are shaken by the corona virus epidemic and Brexit overlap will at least be in 2024 before the pre-epidemic period.
According to the estimate made by EY Item Club using a model similar to the British Treasury, unemployment will rise from 3.9 percent to 9 percent. The real worrying forecast is about the contraction of the economy. In the analyzes made a month ago, it was determined that the British economy would shrink 8 percent in 2020. However, in the last estimates, the contraction will reach 11 percent. If the outbreak ends, the forecasts that it will return to the pre-epidemic period in 18 months are also revised as 2024.
British Central Bank Chief Economist Andy Haldane said in a briefing to lawmakers last week that the economy is in a V-shaped recovery process. He announced that half of the production capacity lost in March and April came back. However, experts consider the opposite.
According to economists, a recovery as fast as Haldane predicted seems difficult. “Although quarantine restrictions are lifted, consumers are much more cautious than expected,” said EY Item Club's chief economic adviser, Howard Archer. In our opinion, unemployment and business investments, along with consumer confidence, will be the determining factors in the recovery of the economy. The British economy may have left the worst period behind, but the climb seems likely to take much longer than expected. ”
The government lowered taxes and made support payments to encourage people to spend. Treasury chancellor Rishi Sunak removed VAT in the hospitality industry. He also pledged to pay a thousand pounds of support for each employee until the end of October. However, it was criticized that the 30 billion dollar package mostly supports the tourism and restaurant sector and ignores other sectors.
British Central Bank said last month that it would transfer 100 billion pounds to the economy to help combat the 'unprecedented' crisis caused by the corona virus outbreak.
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