Chancellor warns of recession 'the likes of which we've never seen'

19 May 2020, 17:24

Rishi Sunak warned of an unprecedented recession
Rishi Sunak warned of an unprecedented recession. Picture: PA

By Ewan Somerville

Britain is facing a “severe recession” on an unprecedented scale, the Chancellor has warned.

Rishi Sunak made the dire warning as he predicted the unemployment rate will hit double figures by the end of the year.

Giving evidence to the Lords economic affairs committee, he said: “Although we have put unprecedented mitigating actions in place, I 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. This lockdown is having a very significant impact on our economy.

“We are likely to face a severe recession, the likes of which we haven’t seen, and of course that will have an impact on employment.”

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He said the “jury is out” on the “degree of long-term scarring” caused by the strict social distancing curbs.

The latest warning of the impending economic toll of the pandemic comes as the number of people claiming unemployment benefit in the UK surged to 2.1 million in April, the first full month of lockdown.

Figures from the Office for National Statistics showed it is a rise of 856,500 on the previous month.

Employment had reached a record high before the shut down on 23 March.

Meanwhile, Department of Work and Pensions data published on Tuesday showed claims for universal credit, the umbrella benefit for working-age people, soared to 1.5 million between 13 March and 9 April, six times more than the same period in 2019.