The International Monetary Fund (IMF) has advised governments and central banks around the planet of the need to carry on providing aid programs and supporting low interest rates while the Covid-19 pandemic grips us. They have warned that stopping the help at this stage could lead to a stock market crash.
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As the country continues to grapple with the effects of the pandemic, there have been renewed calls for interest rates to go below 0%. This comes as retail sales in the UK suffered a big drop in 2020 and fears grow over how deep the upcoming recession may be.
The Case for Dipping Below Zero
The construction sector suffered in 2020 like more other industries in the UK, but the second half of the year saw it begin to recover, as house-building numbers rose and new workers were hired. Meanwhile, the pandemic has led to many financial companies running the risk of going out of business.
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As the country enters its third period of lockdown, chancellor Rishi Sunak has announced another bail-out scheme that is designed to help businesses get through this tough period. Yet, it is believed that the new restrictions will still severely damage the national economy.
What Does the New Package Include?
As 2020 comes to an end, analysts are looking to see how the financial landscape has changed due to Brexit and the coronavirus. One of the clearest signs of the damage done this year is in the stock markets, which dropped heavily in the UK but not in other key exchanges around the planet.
The FTSE Performance
In the UK, the performance of the FTSE 100 in 2020 was worse than anything seen since the crisis of 2008. As it closed for the year, the country’s top index showed a total drop of 14.35%.
With the Brexit deal agreed and the coronavirus vaccine programme started, people are starting to look ahead to see what 2021 might have in store for the British economy. The latest prediction suggests a more modest increase than previously stated, with 4.3% growth over the coming year.
What Are the Numbers Like?
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