OBR suggests hit to economy from Coronavirus measures

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The OBR* has issued an assessment that takes into account the economic impact of the efforts to contain the Coronavirus pandemic. This research suggests there might be a massive short term hit to the UK’s economy.

What are they saying?

It’s important to note that the OBR are not making a prediction or a forecast, which means it may not happen. However, they are trying to understand how things might turn out. They also state that if no action was taken there might also be a large economic cost.

  • Unemployment rising by 2 million
  • GDP (size of our economy) falling by a third between April to June
  • Extra Government borrowing of 220 billion this financial year.

The OBR do also say that the recovery from this should be quick.

 

According to Robert Chote at the OBR;

“The spread of the Coronavirus is likely to have severe short tem consequences …to public finances.
This is a not a forecast, as we have no way of knowing how long the…restrictions will last….We can be confident the cost of inaction would be much greater”.

 

Sources & Notes

The OBR* is the Office of Budget Responsibility. This is a government department that is responsible for analysing Government spending.
Full details here. The short video is a good explanation of their findings.

https://obr.uk/coronavirus-reference-scenario/