UK economy could shrink by 35% in Q2

Bloomberg

A protracted lockdown could see the UK economy shrink by more than a third this quarter, increasing unemployment by more than 2 million and sending the budget deficit to its highest since World War II.
The dire projections were outlined by Office for Budget Responsibility. They are based on a scenario in which Britain remains in lockdown for three months in an effort to bring Covid-19 pandemic under control, followed by a further three-month period when the restrictions are partially lifted.
The fiscal watchdog predicted the hit to the economy will be severe in the short term but prove temporary.
Boris Johnson’s government has offered $75 billion of direct support to help companies and individuals affected by the shutdown of the economy. It includes a pledge to pay 80% of the wages of people put on
temporary leave by their
employers, and increased unemployment support.

“The immediate cost of the government’s actions may be high, but we can be confident that the cost of inaction would ultimately have been much higher,” the OBR said in its analysis.
Under the scenario, real gross domestic products falls by 35% in the second quarter, but bounces back quickly. Unemployment, currently less than 4%, surges to 10% in the period and 218 billion pounds is added to government borrowing in the current fiscal year.
That would take the budget deficit to 273 billion pounds, or 14% of GDP, and push debt above 100% of GDP, the watchdog said.