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According to the latest Reuters poll of nearly 80 economists, the UK GDP is likely to contract sharply in the second quarter of 2020, as the coronavirus pandemic continues to wreak havoc on the economy, despite the re-opening up.

In light of this, the Bank of England (BOE) will likely ease further, by expanding its asset purchases, the Reuters poll found.

Key findings

“The economy would contract 17.3% this quarter, not quite as bad as the 17.5% fall forecast in May. Forecasts ranged from a 6.3% drop to 25.5%.

In a worst-case scenario it will shrink 19.0% this quarter.

This year, the economy will contract 8.7% and then grow 5.5% next year.

26 of 35 respondents, to an additional question, said the BOE was not yet done with easing. All of those said it would again add more QE.

No change in Bank Rate was predicted until 2023 at the earliest.

Over three-quarters, 26 of 34, of respondents to an additional question said the Brexit transition period should be extended.”

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