Britain's finance minister, Rishi Sunak, admitted the government could not protect ‘every business and every household’ from recession, after a government office suggested economy could shrink by 13% this year due to the shutdown
LONDON - Britain’s economy could shrink by 13% this year due to the government’s coronavirus shutdown, its deepest recession in three centuries, and public borrowing is set to surge to a post-World War Two high, the country’s budget forecasters said.
Finance minister Rishi Sunak said he was “deeply troubled” by the prospect that two million people would lose their jobs due to the impact of the virus. Separately, the International Monetary Fund said it expected Britain’s economy to shrink 6.5% in 2020, similar to other economies, before growing by 4.0% in 2021.The OBR said the hit to tax revenues and the government’s huge spending plans meant the budget deficit could hit 273 billion pounds in the 2020/21 tax year — five times its previous estimate.
The OBR said public sector net debt could exceed 100% of GDP during the 2020/21 financial year but end it at around 95%. “It should be borne in mind that the short- and medium-term outlook for the economy and the public finances would be very much worse without any fiscal and monetary response,” the OBR said.
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