Britain’s fiscal watchdog has slashed its outlook for UK economic growth

The video discusses the initial economic forecast before the COVID-19 pandemic, which was expected to have a modest impact on world trade and UK exports. However, the situation changed drastically, leading to significant economic consequences and policy responses, including actions by the Bank of England and a fiscal package. The forecast had to be adjusted, highlighting the uncertainty and risks involved. The video also covers fiscal rules, debt management, and the challenges posed by the pandemic on public finances, emphasizing the need for careful economic planning.

What was the initial assumption about the coronavirus in the Treasury's economic forecasts?

• It would lead to a global recession.

• It would remain largely contained within China.

• It would have no impact on the economy.

• It would spread rapidly worldwide.

What immediate action did the Bank of England take in response to the coronavirus?

• Took monetary action

• Reduced government spending

• Implemented a fiscal package

• Increased interest rates

What is the effective ceiling on public sector net borrowing according to the new fiscal rules?

• 4% of GDP

• 3% of GDP

• 5% of GDP

• 2% of GDP

What is one potential consequence of the coronavirus on the economy mentioned in the transcript?

• Rise in employment rates

• Surge in international trade

• Decrease in demand for goods and services

• Increase in tax receipts

According to the transcript, what is the likelihood of the government meeting the new fiscal rules?

• 80%

• 50%

• 60%

• 70%