Britain’s economy is shrinking at its fastest pace in centuries as the the coronavirus pandemic saps demand, but it’s likely to bounce back to growth next quarter as more businesses reopen, a Reuters poll found.

An historic downturn pushed the Bank of England to unleash unprecedented amounts of stimulus, and while it has slowed the pace of purchases, it is likely to increase its total spending again, the June 19-24 poll predicted.

Although the number of cases reported daily is dropping in Britain, a second wave of coronavirus infections was given as the biggest threat to the economic outlook, according to over three-quarters of respondents to an additional question in the poll.

As activity ground to a near-halt after the March 23 lockdown, the poll predicted the economy would contract 17.3% this quarter, not quite as bad as the 17.5% fall forecast in May. Forecasts ranged from to a 6.3% drop to 25.5%.

In a worst-case scenario it will shrink 19.0% this quarter, according to median forecasts.

But like other countries around the world, Prime Minister Boris Johnson has slowly started to ease lockdown restrictions and the economy was expected to bounce back and grow 10.5% next quarter as a result.

This year, the economy will contract 8.7%, medians in the poll of nearly 80 economists showed, and then grow 5.5% next year.

Source: Reuters