Pandemic could trigger 35% shrink in UK economy if lockdown remains in place for three months, says Office for Budget Responsibility
Britain's independent tax and spending watchdog has warned the coronavirus pandemic could see the UK economy shrink by a record 35% by June.
It said a three-month lockdown followed by three months of partial restrictions would push up Britain's borrowing bill to an estimated £273bn this financial year, or 14% of gross domestic product .While borrowing is expected to jump, the OBR said the government's unprecedented financial help for workers and businesses would help to limit any long-term damage.
The OBR expects a more lasting impact on unemployment, which is estimated to rise by 2.1million to 3.4 million by the end of June. While this will drop sharply as the UK economy recovers, public debt is expected to remain at 84.9% of GDP in four years time, much higher than the 75.3% forecast in the March budget.
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