There is self-evidently going to be a recession.
Output fell in March, across all sectors of the economy and, in many cases, at a record-breaking pace.
The economy contracted by 5.8% in March, the biggest monthly fall that the ONS has ever recorded.
All first estimates are subject to revisions but the ONS says it’s confident it’s got its sums right, that the margin of error will prove to be small.
Lockdown only began on March 23. We lost only seven working days and the results are grim. The contractions in April and May will be even larger.
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Towards the end of March every sector of the economy found a reverse gear. Output in the services sector fell by 6.2%, manufacturing fell by 4.6% and construction 5.9%.
These are extraordinary numbers and will have created significant hardship. The only consolation is that the contraction is less devastating than the markets and The Bank of England were expecting.
Most analysts had penciled in a fall of 8% in March.
Economists at Pantheon say the March data points to the economy being around 20% below its pre-virus level during the lockdown.
We’ll see. The hit in the second quarter will be huge, the important question is how quickly can activity recover.
The answer will depend on how the epidemic pans out, when restrictions lift and the degree to which spending resumes when they do. These things are unknowable.
Businesses and households may well be feeling cautious even as the economy begins to lift. Without an effective vaccine, social-distancing is here to stay.
The unprecedented amount of government support on offer to households and businesses was never going to prevent a recession but it is designed to cushion the blow.
Seven million people have been furloughed in the government Job Retention Scheme. The longer this downturn lasts, the more likely it is they will start to feel unemployed.