The latest publication from the Office for National Statistics has reported that the UK saw a 20.4 percent drop in GDP in April, which was the first full month of coronavirus restrictions. When he was confronted about the figures, Health Minister Edward Argar insisted that the UK “seems to be in a similar place to comparable countries in western Europe” in terms of GDP. Paul Johnson, director of the Institute for Fiscal Studies, warned Sky News that that the “more likely outcome” would be disastrous.
He said: “None of us wants to be where we currently are economically.
“This is economically catastrophic on a scale literally never seen before in history.
“The real question is what happens next.
“What the Government has done is put a lot of measures in place to cushion the economy in terms of people’s living standards and keeping their businesses going through this period.”
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Mr Johnson continued: “So if the virus, in one way or another, disappears over the next few months, and people who are furloughed move back into their jobs, and demand returns, and we get the economy back to where it would have been relatively quickly, then having a disastrous few months won’t be too terrible.
“The real risk, and the more likely outcome, is that the furlough scheme gradually begins to be withdrawn and a lot of jobs will be lost.
“Remember unemployment rose by a million last month, and it will continue to rise.
“More businesses will go out of business and then the issue is that next year we’ll still be in a position where there are fewer businesses operating and fewer people in work.”
He told Sky: “We’ve got the reality of Brexit coming at the end of this year.
“One of the big things about the coronavirus is that it is having a huge effect on international trade.
“One of the reasons the UK is doing badly is that all other economies in the world are doing badly.
“Each economy has a knock-on effect on others because it reduces trade and demand.
“So this is a particularly bad time to add a shock to trade, Brexit or not.”