UK economy to slump 9.8% this year on virus: IMF

UK economy to slump 9.8% this year on virus: IMF




A video grab from footage broadcast by the UK Parliament’s Parliamentary Recording Unit (PRU) shows Britain’s Prime Minister Boris Johnson speaking to give a statement on new Covid-19 alert system of restrictions in the House of Commons in London on October 12, 2020. – British Prime Minister Boris Johnson was set to present a new three-tiered alert system for coronavirus cases in England on Monday, with northwestern Liverpool expected to be the only city placed in the top category. (Photo by – / various sources / AFP) / RESTRICTED TO EDITORIAL USE – MANDATORY CREDIT ” AFP PHOTO / PRU ”

The International Monetary Fund on Tuesday forecast that the recession-wracked British economy will shrink by almost ten percent this year on coronavirus fallout.

A contraction in the gross domestic product of 9.8 percent would, however, be an improvement on the previous IMF forecast of 10.2 percent, the Fund added.

The UK economy is predicted to grow by 5.9 percent in 2021, down from prior guidance of 6.3 percent, according to the Fund’s latest World Economic Outlook.

Britain, like many countries, is grappling with a renewed rise in Covid-19 infections, rolling out fresh social-distancing restrictions that are hampering economic recovery.

Recent official data showed that the UK economy shrank in the second quarter by almost a fifth — more than any European neighbour.

Britain’s nationwide lockdown, imposed on March 23 for about three months, plunged the country into its deepest recession on record.

The outlook could meanwhile darken further if Britain and the European Union fail to strike a post-Brexit trade deal, with fresh talks due this Thursday and Friday in Brussels.

The IMF noted that a failure to forge a trade deal by December 31 “would increase business costs and could disrupt long-standing cross-border production arrangements.”

The Bank of England in particular cautions that the outlook remains linked to the nature of the country’s future trading position.

Britain officially left the bloc on January 31 but remains under EU rules until the end of the year as both sides try to thrash out terms of a new relationship.





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