UK economy buckles under costs of Covid-19 lockdown
The UK economy is crumbling under the strain of the coronavirus lockdown and government borrowing is soaring to the highest levels in peacetime history, increasing pressure on the government to set out an exit strategy.
British prime minister Boris Johnson is facing criticism from opposition politicians and some epidemiologists for reacting too slowly to the novel coronavirus outbreak.
“We are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries,” said Bank of England interest-rate setter Jan Vlieghe, adding that the recovery is unlikely to be swift.
The UK Composite Purchasing Managers’ Index fell to a record low in March. The UK will issue £180bn (€204bn) of debt between May and July, more than it had previously planned for the entire financial year.
The country’s debt mountain exceeds €2.3 trillion and its public sector net borrowing could reach 14% of GDP this year, the biggest single-year deficit since the Second World War.
The British government’s as yet unpublished strategy for unwinding from the lockdown is also under scrutiny.
“The UK is lagging behind almost any medium-to-large economy globally when it comes to coronavirus tests,” said Deutsche Bank’s Oliver Harvey.
