Coronavirus: ‘Recession the likes of which we haven’t seen in Britain’, says Rishi Sunak

Britain is facing ‘a severe recession, the likes of which we haven’t seen’, says Chancellor of the Exchequer Rishi Sunak.

Rishi Sunak testifies to the House of Lords economic affairs committee. Picture: AFP

Britain is facing “a severe recession the likes of which we haven’t seen’’, says Chancellor of the ­Exchequer Rishi Sunak as a grim lockdown continues to destroy the British economy.

Mr Sunak told the Lords economic affairs committee on Tuesday night that he wouldn’t be able to protect every job and business.

“We are already seeing that in the data, no doubt there is more hardship to come — this lockdown is having a very significant impact,’’ he said. “We are likely to face a severe recession, the likes of which we haven’t seen.

“It isn’t obvious that there will be an immediate bounce back”.

Mr Sunak has been concerned that the extended lockdown is creating an economic hole the country will struggle to emerge from.

Prime Minister Boris Johnson has continued to keep most of British industry locked down since March 24 and only last week were construction companies and manufacturers urged to restart. Retailers and shops won’t open before June 1 at the earliest and hospitality venues are shut until at least July 1.

While the total death toll from the coronavirus in the UK is more than 34,000, the “excess deaths’’ from people not attending hospital, suicides and other unexplained causes is more than 14,000, new data released on Tuesday shows.

The peak of the virus was in March and for many weeks hospital admissions have declined and the weekly death toll continues to fall, yet a large proportion of the public remains terrified.

Many families are planning to resist sending their children back to school when a staged education reopening is due on June 1.

Mr Sunak told peers the “jury is out” on the depth of economic “scarring”.

“There is the immediacy of impact, the depth of recession we are passing through ranges from 25 to 35 per cent (drop in GDP) … a ­severe recession, the likes of which we haven’t seen,” he said.

“What occupies my mind is what degree of long-term scarring on the economy as result of this recession, what is lost in productive capacity.’’ He agreed the impact of coronavirus could exceed £330bn and would be “significant by historic standards”.