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New quarantine keeps British GDP at bay

The strengthened coronary action in the United Kingdom is hampering the recovery of the British economy. In the first quarter of this year, it is likely that there will be a further contraction, predicted by the British central bank.

The outlook for the whole of 2021 has also been revised downwards. The Bank of England believes that the British economy will grow by about 5% this year. The previous estimate in November counted on a plus of 7.3%. This gloomy prospect is a serious blow, but it was to be expected because the British are currently facing severe lockdown measures again.

However, decision-makers at the central bank do not yet see the need for further action. They decided on Thursday to keep interest rates at the same low level and not to tinker with the bond buy-up policy. As a result, the main interest rate in London remains at 0.1 percent, the lowest level ever.

British banks did receive a double message. The Bank of England wants them to prepare for negative interest rates, but the financial sector should not, according to the central bank, regard this as a signal that there are really negative interest rates in the pipeline.

Brian O'Neil

Brian O'Neil is the founder and chief editor. He was a journalist in the original LS TV before it closed in 2017.

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