Video report by ITV News Economics Editor Joel Hills
The UK is "likely to face a severe recession the likes of which we have not seen" due to the coronavirus lockdown, the chancellor has warned.
Rishi Sunak, giving evidence to the House of Lords Economic Affairs Committee, said "lockdown is having a very significant impact on our economy", despite the "unprecedented mitigating actions" imposed to protect the economy.
Several measures have been introduced to shield public services, jobs and firms from impacts of lockdown, such as the furlough scheme, but the chancellor said he "certainly won't be able to protect every job and every business".
"We’re already seeing that in the data, and no doubt there will be more hardship to come."
Even as the sections of society are released from lockdown, Mr Sunak warned it is "not obvious that there will be an immediate bounce back" from the economy.
"We all would hope that it is as swift and strong as it can be," he said, but data from around the world suggests a bounce back will not be quick.
"If we can re-open retail, which I would very much like to be able to do on 1 June, there will still be restrictions on how people can shop, which will have an impact likely on how much they spend," he said.
"And those things will all take time. So I think, in all cases, it will take a little bit of time for things to get back to normal, even once we’ve re-opened currently closed sectors."
Mr Sunak said the longer a recession goes on, the more chance there will be of "scarring" - lasting damage to the economy and people's wages.
"The longer the recession, the likelihood the degree of scarring is higher," he said.
On May 14, ITV News Business and Economics Editor Joel Hills said "there is self-evidently going to be a recession".
Joel Hills speaks to Presenter Tom Bradby on ITV's News At Ten
More than eight million jobs have been furloughed so far and 1.1 million people have accessed help under the Self-Employment Income Support Scheme.
Despite the measures, in April the UK's employment figure fell by 457,000 on the previous month.
It is estimated by the Office for Budget Responsibility that government finance schemes will eventually cost the UK £123bn.