Amid the unprecedented coronavirus pandemic, the United Kingdom Finance Minister Rishi Sunak reportedly said that country is facing a ‘significant recession’. According to an international media report, Britain’s economy shrank by two per cent in the first three months of the year due to the impact of the deadly virus which led to the economic lockdown. While speaking to the media outlet Sunak said that the country is, however, yet to fulfil the technical definition of a ‘recession’ as Britain also had two successive quarters and the minister believes that it just a ‘matter of time’.
Sunak said, “The first quarter was that bad based on just a few days of the impact of coronavirus in March. It is very likely that the UK is facing a significant recession at the moment and this year”.
He added, “It's premature to speculate about that far in the future. We are living in a time of unprecedented economic uncertainty. What we are thinking about foremost at the moment is protecting people's health”.
Sunak’s warning comes after the UK's Office for National Statistics (ONS) released data to show that the hit of the economy in late March had affected almost every sector of the economy. The ONS reported that the output had dropped by almost as much in a single month as in the 18-month decline during and after the financial crisis of 1008-09. As per reports, ONS said that the impact of the virus was seen right across the economy, with nearly all sub-sectors falling int he three months to March.
While the figures released by ONS were the first official look at the lockdown’s financial effects, earlier this week, Sunak also extended the job retention scheme by a further four months until the end of October to boost millions jobs and businesses. The Indian-origin Finance Minister said in a statement that the government, by that time, will have provided eight months of support to British people and businesses.
He reportedly said that there will be no change in the scheme until the end of July but new flexibility will be introduced from August to support the transition back to work. According to the treasury department, specific details regarding the introduction of flexibility will be made available by the end of May.