Why is UK’s economic slump worst in world? asks Robert Peston

The Bank of England has pumped £150bn into the UK's struggling economy. Credit: PA

Another striking characteristic of today’s Bank of England projections is that UK GDP, or national income, is set to shrink by 11% for the whole of 2020, a record.

We are losing more than one in every £10 of our income, one of the worst performances in the world: the fall in US GDP is forecast at “just” 3.75%, the euro-area shrinkage is 6.75% and the global decline is projected at 5.25%.

Given that the virus is the same virus everywhere, it is difficult to argue that the UK’s policy response to it has been economically optimal, even adjusting for the UK’s disproportionate reliance on services that thrive on the kind of human contact that the virus has made dangerous.

It is not over till it is over, but the combination of excess deaths and excess economic loss in the UK raises big questions for the government.

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The Bank of England includes as one of its “conditioning assumptions” for its forecasts that Bank Rate - the interest rate that is the benchmark for all rates - becomes negative for the first time in history next year, at minus 0.1%.

It describes a world in which banks are charged for not lending to us and we are charged for saving. And it is one manifestation of the desperate economic scarring caused by the virus.