UK economy may suffer deepest recession in century

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LONDON

As the lockdown in Britain remains in place for at least another three weeks without a clear exit strategy, economists said the country’s economy could face the deepest recession in 100 years. The British government announced that the current restrictive measures that aim to contain the spread of the novel coronavirus will remain in place for “at least three weeks”. A big question arose over when or how the restrictions will be relaxed. “Uncertainty around the length of the lockdown is likely to be a key factor behind the wide range of GDP forecasts for 2020,” said Andrew Goodwin, chief UK economist at Oxford Economics, in a research paper published. He explained that the estimates of the scale of the decline in Britain’s gross domestic product (GDP) in the first half year in 2020 are very sensitive to the duration of the lockdown. In the latest forecast, which assumes the lockdown remains in place until mid-May and is then eased gradually, Goodwin expected the country’s GDP to fall by 5 percent in 2020. The last time the economy suffered a recession on this scale was 1921. The National Institute of Economic and Social Research (NIESR) also said the “once in a century event” poses major threat to Britain’s economy growth, and the lockdown is causing the largest contraction in economic activity since 1921 earlier this month. NIESR projected in its latest paper that Britain’s economy could see growth shrink by 5 percent in the first quarter of 2020, and if a lockdown continues, by around 15 percent to 25 percent in the second quarter. “The forceful impact of COVID-19 and the global lockdown has thrust the economy into unknown territory where we could see GDP declining at a record quarterly rate,” said Kemar Whyte, senior economist of macroeconomic modelling and forecasting at NIESR.— Xinhua