Chancellor Rishi Sunak warns of economic hardship
After months of trying to convince the British public that the economic fallout from the coronavirus pandemic can be swiftly reversed, the Chancellor of the Exchequer has now turned around and poured cold water on those hopes.
Rishi Sunak now claims that it is “not obvious there will be an immediate bounceback” for the economy once the coronavirus lockdown has been sufficiently eased.
Speaking to the House of Lords Economic Affairs Committee, Sunak claimed that the issue which occupies him the most is “what degree of long-term scarring is there on the economy”.
In a rare moment of honesty, the chancellor admitted that “all economic forecasters and economists would agree the longer the recession is, it is likely the degree of that scarring will be greater”.
When pressed further by the committee, Sunak admitted that the economic impact of the pandemic will be “severe”.
Sunak’s grim warning came on the heels of the release of figures showing the number of people claiming unemployment benefit increased to 2.1 million in April.
According to the Office of National Statistics, the jump of 856,000 claims in April reflects the impact of the first full month of the coronavirus lockdown.
Another piece of bad economic news for the government is the skyrocketing universal credit claims across the country. Universal credit is a social security payment which combines six previous benefits for working-age people into a single benefit.
According to official figures from the Department for Work and Pensions, 1.5 million universal credit claims were made between March 13 and April 09.
The rapid succession of grim economic news is likely to further erode the public’s confidence in the government’s ability to successfully manage all the dimensions of the coronavirus crisis.
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