UK economy 'to shrink up to 30%' as Johnson faces dealing with gravity of the Covid-19 toll

Britain’s chancellor of the exchequer has reportedly told colleagues the economy could shrink by up to 30% this quarter because of the coronavirus lockdown, as the soaring death toll gave little hope restrictions would soon be lifted.
UK economy 'to shrink up to 30%' as Johnson faces dealing with gravity of the Covid-19 toll

Additional reporting: Irish Examiner

Britain’s chancellor of the exchequer has reportedly told colleagues the economy could shrink by up to 30% this quarter because of the coronavirus lockdown, as the soaring death toll gave little hope restrictions would soon be lifted.

The number of Covid-19 deaths in hospitals across the UK has passed 10,000 and a senior scientific adviser to the UK government has said the country risks becoming the worst-hit in Europe.

The British government has had to defend its response to the outbreak, with complaints of insufficient testing, a dearth of protective kit for medics and questions about whether Boris Johnson was too slow to impose a lock down.While there was widespread sympathy for Mr Johnson across the political spectrum over his own illness, his upbeat message could not disguise the gravity of the choices now facing his government.

The Times newspaper reported that Chancellor Rishi Sunak had discussed with colleagues the possibility that GDP could shrink by 25% to 30% between April and June. Mr Johnson’s spokesman said people should wait for official economic data to be published rather than speculate. “(Sunak) has been very clear about the significant impact which the coronavirus pandemic is having on the economy,” he said.

Citing unnamed ministers, the Times reported that Mr Sunak and others were pushing for social distancing measures to be relaxed for the sake of the economy, while ohers were resisting because of the risk of exacerbating the coronavirus outbreak. A UK government review of the current measures, which have been in place since March 23, is scheduled to take place by Thursday. It  is widely expected to extend the restrictions.

The UK Treasury said in a statement that its emergency funding for public services now totalled £14bn (€16bn), up from £5bn announced in Mr Sunak’s annual budget before the lock down was imposed. A shrinking UK economy and a prolonged shutdown in the UK has implications for Irish exporters who rely on the British market.

Sterling has also slid against the euro during the crisis, making it more difficult for Irish firms to sell into Britain at competitive margins.

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