The Bank of England’s Monetary Policy Committee (MPC) has voted to hold Bank rates at 0.1%, as the Bank forecast’s the worst decline since the financial crisis and that GDP could fall by 14% this year.
Household spending could drop by 14% and Business investment likely to fall by 20%.
The Bank said “CPI inflation could fall below 1% in the next few months from 1.5% back in March.
The MPC minutes detailed forecast said, “There will be a sharp drop in UK GDP in 2020 H1 and a large increase in unemployment including the workers currently on furlough”.
The fall in GDP should be temporary and the Bank expects activity to pick up quickly. The Bank finished off saying “The economy will take time to recover as businesses and households will be taken precautionary measures”.
An understandable and fully anticipated move.