Name: Bank of England warns of Coronavirus and Brexit damage to economy - BBC News
Uploaded: 2020-11-09T18:55:07.000Z
Duration: 3 min 58 s
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The Bank of England warned today that the economy is once more shrinking sharply and won't get back up to its pre co VID level until the start of 2022.

The bank is now preparing to pump in additional £150 billion into the economy to soften the impact of more lockdowns.

It's Governor Andrew Bailey also warned that Brexit would harm economic growth in the first six months of next year.

Even if there is a trade deal with EU, he said many firms hit by covert aren't prepared for new border checks.

Our economics correspondent Andy Verity reports Sainsbury announces its shedding 3.5 1000 jobs and closing 420 standalone Argos stores after revealing a £137 million loss.

And that's just day one of the new lock down for an economy that was recovering since the spring, Trouble is once again brewing this Walthamstow beermaker double capacity before co vid the pre Christmas period should have been a chance to restore its fortunes.

I'm really super proud of the way a love our staff, especially our younger members of staff, have really handled it they have bean adaptable.

They have bean willing to kind of get stuck in at every turn.

Things have really, really hard on, especially hot hospitality staff, like these people don't get paid like the most in the world.

They are by nature, quite vulnerable staff.

So we're doing our best today, the Bank of England warned.

It looks like the economy will end up, you know, 10 or 11% below the level of activity we had a the end of last year.

Now that is, you know, historically unprecedented.

Pretty much I can't give you exact figures for the last 300 years, but it's a huge impact.

I mean, there's nothing you know, certainly in modern times that we could point to, which would be like that.

The economy took a record drop in the second quarter of the year.

It did recover much of that ground in the third quarter, and that was supposed to continue.

But now the Bank of England says the economy shrinking again, and it won't get back up to pre co vid levels until 2022.

To try and soften the blow, the Bank of England will now create another £150 billion at the stroke of the keyboard.

That should ensure the government can borrow cheaply, keeping interest rates as low as possible.

So this prolonged slump is no longer than it has to be.

Andy Verity, BBC News Bank of England Our business editor, Simon Jack, is here.

So a surprise announcement from the chancellor to date on furlough Did he have any choice?

Earlier this year, he decided that he would bet it was better use of money to spend tens of billions of pounds subsidizing wages, keeping them close to their employers, preventing mass unemployment in the huge damage that would do to the economic and social fabric of the country than the mass unemployment that you would have had otherwise.

But that was predicated on the basis that he thought the virus by now would be in retreat.

Now, clearly the game has changed, said the decision was, Does he fold that bet?

Fold his cards, at which point he spent £50 billion and still gets mass unemployment.

Or do you double down, buy yourself a bit more time and go into next year?

It was a surprise he went as far as March, and I think that was an attempt to try and get a slightly ahead off a situation that the Labor Party say on others say he managed to get himself behind.

So if you kept putting in more money each month, that looked as if he was being dragged to the wicket.

But I think one of the group that won't be very happy is the original measures did exclude some people self employed who are or small directors of companies.

They I think we'll find a galling heartbreaking even to see billions more going to them with people who already have had some assistance with none to them.