17 March 2020
Monthly Economic Update
Every month, our economists study the macroeconomic situation. They analyse the events that have had an impact in recent months, and discuss possible consequences.
Coronavirus: Exceptional times require exceptional measures
Since our last regular monthly update earlier this month, the Federal Reserve has cut interest rates by 150 basis points, the European Central Bank introduced several liquidity measures and increased quantitative easing, and the Bank of England cut rates by 50bp.
At the same time, Covid-19 is quickly spreading across Europe and the US. Not only are governments taking unprecedented steps to slow down the spread of the virus, they have also started to announce fiscal support measures such as short-time work schemes,
liquidity support and loans.
The situation in many European countries is increasingly looking like a national emergency and the number of European countries announcing lockdowns is increasing by the day. The economic impact of all these events and measures is still uncertain. While it is completely different in nature, the current crisis could have a similar economic impact as the 2008/09 crisis. It will, in any event, have a stronger impact than we had pencilled in two weeks ago.
We've therefore updated our forecasts for the major economies