Forecast: Coronavirus measures to cut Britain’s GDP by 15 per cent
Measures to curb the coronavirus pandemic are likely to cause a slump of 15 per cent in Britain’s economic output in the next three months as the country enters the deepest recession since the 2008 financial crisis, a think-tank said on Monday.
The British government imposed a lockdown last week and is expected to tighten its measures this week, after a top health adviser warned that the country should expect up to 20,000 Covid-19-linked deaths.
“The UK economy is about to enter the deepest recession since the financial crisis, including the steepest quarter-on-quarter decline in economic activity since comparable records began,” the Centre for Economics and Business Research said in a report.
The forecast of a 15-per-cent fall in GDP in the quarter to June 30 assumes that “restrictions on businesses and the wider populations will be loosened by the third quarter as testing becomes more widely available, helping to identify and isolate infection hotspots more efficiently.”
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If the measures are loosened, the economy is likely to record a “sharp bounce back” in the second half of the year, but unemployment is still forecast to soar to 7 per cent, the centre said.
Full-year GDP for 2020 is expected to fall by 4 per cent, recovering to grow by 3.5 per cent next year, the think-tank said.
It warned that falling business investment could take a decade to recover to a 2017 peak unless the government can stimulate it, while house prices are expected to fall by about 15 per cent over the next two years. (dpa)
