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| Coronavirus: UK growth could drop by record 35% by June | Coronavirus: UK growth could drop by record 35% by June |
| (32 minutes later) | |
| Britain's independent tax and spending watchdog has warned the coronavirus pandemic could trigger a record 35% drop in UK growth by June. | Britain's independent tax and spending watchdog has warned the coronavirus pandemic could trigger a record 35% drop in UK growth by June. |
| The Office for Budget Responsibility said that this was based on an assumption that the current lockdown would last for three months. | |
| Under this scenario, unemployment would hit 10%, from its current 3.9% rate. | |
| However, once restrictions were lifted, the OBR said it expects growth to recover quickly with no lasting damage. | |
| The OBR outlined the potential hit to the economy and public finances in a special report on Tuesday. | |
| 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 (GDP). | |
| This would represent the largest deficit as a share of GDP since World War II. | |
| 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. | |
| It expects half of the sharp drop in economic growth in the second quarter to be reversed in the three months to September. | |
| While the UK economy is expected to contract by 13% for the year as a whole, the UK is expected to get back to its pre-crisis growth trend by the end of 2020. |