The UK economy is heading for its worst crash in 300 years

The UK economy is heading for its worst crash in more than 300 years because of the coronavirus pandemic, according to a new forecast from the Bank of England.

The central bank said Thursday that the British economy could shrink by 14% this year. That would be the biggest annual contraction since 1706, based on the bank’s own best estimate of historical data.

Governor Andrew Bailey said it would respond as necessary to support the economy as the coronavirus threat evolves, but stopped short of announcing any new stimulus measures.

In a report that examined the impact of the pandemic, the Bank of England said that GDP contracted by 3% in the first quarter of this year and would fall by as much as 25% in the second quarter, leaving the economy about 30% smaller than it was at the end of 2019. Unemployment is expected to increase to 9%.

The central bank slashed interest rates to a record low in March and has launched a £200 billion ($248 billion) bond buying program that is designed to counter the economic shock caused by weeks of lockdown measures and lost production.

More action is likely to be taken in the coming months. Two members of the monetary policy committee voted to pump another £100 billion ($124 billion) into the stimulus program, and outside economists expect other members to agree once the situation becomes clearer.

The central bank expects a swift economic recovery next year, but it warned that much depends on how the pandemic evolves. If the coronavirus continues to spread, and the government is forced to extend or reintroduce lockdowns, much more than £100 billion could be needed.

“The bank may end up going much further,” said researchers at Capital Economics.