Bank of England warns unemployment will rise 'materially', and leaves rates on hold – business live

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Rolling coverage of the latest economic and financial news, as the Bank of England warns the outlook for the UK and global economies remains unusually uncertain

7.12am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Unemployment is on track to rise sharply by the end of the year as the Covid-19 pandemic hits the UK economy.

Employment appears to have fallen since the Covid-19 outbreak, although this has been very significantly mitigated by the extensive take-up of support from temporary government schemes. Surveys indicate that many workers have already returned to work from furlough, but considerable uncertainty remains about the prospects for employment after those support schemes unwind.

In the near term, the unemployment rate is projected to rise materially, to around 7½% by the end of the year, consistent with a material degree of spare capacity.

UK GDP is expected to have been over 20% lower in 2020 Q2 than in 2019 Q4. But higher-frequency indicators imply that spending has recovered significantly since the trough in activity in April.

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