This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.bbc.co.uk/news/business-53675467

The article has changed 13 times. There is an RSS feed of changes available.

Version 0 Version 1
Downturn less severe than feared - Bank of England Downturn less severe than feared - Bank of England
(32 minutes later)
The UK economy faces a less severe downturn but slower recovery from the coronavirus pandemic, according to the Bank of England The UK economy faces a less severe downturn but slower recovery from the coronavirus pandemic, according to the Bank of England.
The Bank expects the economy to shrink by 9.5% in 2020. It expects the economy to shrink by 9.5% in 2020.
While this would be the biggest annual decline in 100 years, it compares with an initial estimate of a 14% contraction. While this would mark the biggest annual decline in 100 years, it compares with an initial estimate of a 14% contraction.
However, the Bank warned that the jobs market recovery would take longer as it held interest rates at 0.1%.However, the Bank warned that the jobs market recovery would take longer as it held interest rates at 0.1%.
In its first official forecasts since the pandemic hit, the Bank said it expects the economy to grow by 9% in 2021, and 3.5% in 2022. This compares with estimates of 15% and 3% respectively, in a scenario set out in May. In its first official forecast since the pandemic hit, the Bank said the recovery had been "earlier and more rapid" than it had assumed in May, reflecting a sooner-than-expected easing of lockdown restrictions.
, compared with It said spending on clothing and household furnishings was now back to pre-Covid levels, while consumers have carried on spending more on food and energy than before the lockdown.
However, it said leisure spending and business investment remained subdued, which would weigh on the recovery.
Slower recovery
The Bank expects the UK economy to grow by 9% in 2021, and 3.5% in 2022, with the economy expected to get back to its pre-Covid size at the end of 2021.
This compares with growth estimates of 15% and 3% respectively, in a scenario set out in May.
Unemployment is expected to rise "materially" to 7.5% at the end of this year as government-funded support schemes come to an end.
The Bank's latest forecasts are based on the continued easing of nationwide lockdown measures and a smooth transition to a new EU free trade agreement at the start of 2021.