The UK will experience the worst economic contraction among developed countries due to the coronavirus pandemic, according to a new forecast.
The Organisation for Economic Co-operation and Development (OECD) predicts the British economy will shrink by 11.5% in 2020 due to the lockdown imposed since the first wave of coronavirus outbreak.
France is expected to see its annual GDP contract by 11.4%, and a fall of 11.3% is projected for Italy.
The OECD said the health crisis is "without precedent in living memory" and has led to the "most severe economic recession" in nearly a century.
Chancellor of the Exchequer, Rishi Sunak, said the UK economy was experiencing difficulties similar to other countries around the world.
He said: "I've been clear that our top priority has always been to support people, jobs and businesses through this crisis- and this is what we've done.
"The unprecedented action we've taken to provide lifelines that help people and businesses through the economic disruption will ensure our economic recovery is as strong and as swift as possible."
Globally, economic activity would fall by 6% this year while unemployment would rise by 9.6% compared to 5.4% in 2019.
The report also said economic recovery remains highly uncertain as most countries are vulnerable to a second wave of COVID-19 infections.
If there is a second wave of infections, the UK could face an even deeper contraction of 14%. Though that scenario will see Spain, France and Italy's GDP fare marginally worse.
The "double-hit scenario" would see unemployment in the UK rise to 10% and remain at that level throughout the next year despite the use of the government's furlough scheme.
The chancellor said the government was meeting its self-imposed five tests to reopen the economy, despite concerns from government scientists about the resurgence of the disease.
Mr Sunak urged shoppers to return to the high street when general shops begin opening up in the coming weeks. The longer the economy was shut down for, the worse the implications, he said.
Latest data from the Treasury department showed 8.9 million workers had been furloughed until the week to 7 June directly costing the taxpayer £19.6bn.
The OECD also made recommended the UK government to delay the end of the transition period with the EU.
It added: "Given the economic disruption caused by COVID-19, a temporary extension of existing trading relationships with the EU beyond the end of 2020 would help reduce uncertainty."
https://news.google.com/__i/rss/rd/articles/CBMibmh0dHBzOi8vbmV3cy5za3kuY29tL3N0b3J5L2Nvcm9uYXZpcnVzLXVrLXRvLXNlZS13b3JzdC1lY29ub21pYy1jb250cmFjdGlvbi1hbW9uZy1kZXZlbG9wZWQtY291bnRyaWVzLTEyMDAzOTQ40gFyaHR0cHM6Ly9uZXdzLnNreS5jb20vc3RvcnkvYW1wL2Nvcm9uYXZpcnVzLXVrLXRvLXNlZS13b3JzdC1lY29ub21pYy1jb250cmFjdGlvbi1hbW9uZy1kZXZlbG9wZWQtY291bnRyaWVzLTEyMDAzOTQ4?oc=5
2020-06-10 09:15:13Z
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