Britain’s economy is likely to suffer the worst damage from the Covid-19 crisis of any country in the developed world, according to a report by the Organisation for Economic Cooperation and Development.
A slump in the UK’s national income of 11.5% during 2020 will outstrip the falls in France, Italy, Spain, Germany and the US, the Paris-based thinktank said.
Germany’s decline in national income (GDP) is forecast to be 6.6% this year while Spain’s GDP will fall by 11.1%, Italy’s by 11.3 and France’s by 11.4%. The US, the world’s largest economy, is expected to take a hit of 7.3%.
Highlighting the task awaiting the UK government as it seeks to ease the lockdown, the OECD warned that countries forced to impose the most draconian restrictions faced a long haul back to previous levels of activity.
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Anneliese Dodds, Labour’s shadow chancellor, blamed the “deeply worrying” OECD forecast on the government’s “failure to get on top of the health crisis, delay going into lockdown and chaotic mismanagement of the exit from lockdown”, which she argued made the economic impact of the crisis worse.
Responding to the report, the chancellor, Rishi Sunak, said the UK was suffering “in common with many other economies around the world” and the priority was to “support people, jobs and businesses through this crisis – and this is what we’ve done”.
Britain, which is forecast to post an increase in unemployment to around 9%, could make its situation more difficult if it failed to secure a lasting agreement with the EU on trade and access to the single market, the OECD said.
“The failure to conclude a trade deal with the European Union by the end of 2020 or put in place alternative arrangements would have a strongly negative effect on trade and jobs,” it said.
Source: UK economy likely to suffer worst Covid-19 damage, says OECD
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