Worst job losses for decades, warns Bank

BRITAIN is facing the most dramatic rise in unemployment in a lifetime, the governor of the Bank of England warned yesterday.

Andrew Bailey announced plans to pump another £100billion into the economy to help combat the ‘unprecedented’ downturn triggered by the pandemic.

‘There is no doubt we are looking at the steepest trajectory of rise in unemployment because of the sheer nature of what has happened,’ said Mr Bailey, 61. The Bank has predicted that unemployment will more than double to 9 per cent – with almost 2million thrown out of work.

The Bank’s Monetary Policy Committee, which kept interest rates at a record low of 0.1 per cent, voted by eight to one for another £100billion of quantitative easing – digitally creating money to buy up assets such as government bonds, or gilts.

It comes on top of the £200billion at the beginning of the coronavirus crisis and takes the total quantitative easing since the 2008 financial crash to £745billion. However, the Bank said the impact of Covid-19 on the economy may be less severe than it initially feared, with evidence that consumer spending and housing activity has started to pick up.

It predicted the economy will shrink 20 per cent in the first half of the year, less than 27 per cent it had forecast. But it has warned of unemployment rising more sharply than feared, with many of the 9.1million furloughed under the Government’s scheme losing their jobs.

Firms including British Airways, BP, Virgin Atlantic and Rolls-Royce plan to axe tens of thousands of jobs, despite furloughing huge numbers.