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UK economy takes big dip

International 15 Apr, 2020 Follow News

Millions of UK jobs will be lost

Britain's economy could shrink by 35 percent in the second quarter and see unemployment jump by two million, according to a scenario published by the Office for Budget Responsibility.

The UK fiscal watchdog published an estimate of the potential impact of the pandemic based on a three-month lockdown followed by a three-month period when restrictions are only partially lifted.

It sees Gross Domestic Product bouncing back quickly after its sharp contraction in the April-June period but estimates that the jobs market will take longer to recover.

The big increase in joblessness would take the unemployment rate up to 10 percent a level not seen since the early 1990s. The rate currently stands at 3.9 percent.

The OBR scenario sees government borrowing for 2020-21 climbing significantly, at least 14 percent - the largest single year deficit since the Second World War.

That is based on an assessment of the devastating economic impact of the lockdown on tax receipts as well as the additional spending by the government to try to address the crisis.

Those interventions will support individuals and businesses through the period and boost the availability of finance, the OBR said.

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