OBR suggests hit to economy from Coronavirus measures
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.