The Daily Times Newspaper

British Economy Shrinks Again Due to New Lockdown

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The tightened corona measures in the United Kingdom are hindering the recovery of the British economy.

 

The British central bank predicts that the British central bank will probably see another contraction in the first quarter of this year.

The outlook for the whole of 2021 has also been adjusted downwards. The Bank of England expects the UK economy to grow about 5 percent this year.

In the previous estimate in November, a plus of 7.3 percent was expected. This gloomy outlook is a major downer, but it was expected because the British are currently facing strict lockdown measures again.

Still, policymakers at the central bank do not think it necessary to intervene further. They decided on Thursday to keep interest rates at the same low level and not tinker with bond buyback policies.

The introductory interest rate in London, therefore, remains at 0.1 percent, its lowest level ever.

British banks did receive a double message. The Bank of England wants them to prepare for negative interest rates. Still, according to the central bank, the financial sector should not take that comment to signal that negative interest rates are actually on the way.

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