British Economy May Shrink 10 Percent in the First Half of Year

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The UK economy may shrink by as much as 10 percent in the first half of this year, due to the impact of the new coronavirus…

 

This can be deduced from estimates by economists at the Bloomberg news agency.

In a report published Monday, British economist Dan Hanson states that the British government and the Bank of England must step in to bring about a turnaround.

He predicts that the government will lend £ 95 billion this year to fight the virus. £ 17.5 billion of this is earmarked for a wage subsidy program.

The forecast projects the UK government to impose a four-week lockdown in April to stem the spread of the virus. The duration of containment measures is the most significant uncertainty in the estimate, according to Hanson.

In a more severe scenario, with a six-week lockdown, the economy could shrink by as much as 14 percent.

If the measures last until the second half of the year, the costs will be huge, the economist warns. Under the baseline scenario, the UK economy will contract by 2.7 percent in 2020, compared to a 1 percent growth forecast before the corona crisis.

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