By Chathushka Perera
London, UK (CWBN)_ With Tier III lockdowns set in place in a late bet to control the rapid spread of Covid, the economic situation in the UK is deteriorating fast, especially with regard to growth rates, business bankruptcy and unemployment, and the added constraints posed by post-Brexit, UK-EU relationships.
Hence the Bank of England (BoE) has announced that it would be hammering a 150 billion GBP into the local economy. The BoE has also informed that it is expecting the economy to shrink up 2% in course of 2020 but would recover in 2021 provided the pandemic is contained. Interest rates have also been reduced to 0.1%.
Moreover, the BoE stated that it is expecting a sharp rise in unemployment, currently at 4.5%, by about 7.75% well into mid-2021, however, the World Economic Outlook states that the UK expected to face a 4.9% decline this year, whereas International Monetary Fund (IMF) states it could be as far down as 10.2%.
Currently millions of jobs in the UK, including those who are self-employed, are being supported by the government’s furlough scheme, accounting for 80% of a worker’s salary for the hours they have been unable to work due to the lockdown. The maximum payment made under the furlough scheme stands at 2500 GBP per month with other benefits yet to be announced.
Local businesses are also supported under the furlough scheme with up to 3000 GBP per month.
