Kate Andrews

Just days after the Office for Budget Responsibility announced its economic forecasts in March, the reality of Covid-19’s impact on the UK economy sunk in, and its projection was rendered completely obsolete. A month later, with a clearer picture of the toll the virus and lockdown have taken, the OBR today released its new coronavirus analysis, showing a staggering 35 per fall in real GDP in the second quarter, and an unemployment spike of up to 10 per cent – that is, 2 million additional people out of work.

Perhaps today, more so than any day before it, we understand the trade-offs of this lockdown. An Easter Sunday that would normally be spent with loved ones will be spent by many people alone. Churches are a no-go zone. Friends who live down the street feel miles away. Family traditions and big meals are, at best, shared together on video apps – for others, they’re on hold until next year. These are the harsh realities of the lockdown, designed to slow the spread of a deadly pandemic. But the vast majority of us understand why it’s so important to stay inside right now – and are willing to keep doing so.

At Wednesday's coronavirus briefing, Chancellor Rishi Sunak turned his attention (and the Treasury’s coffers) to the charity sector, which will receive £750 million to support vital services for the community. The money will be divided between small, local charities working with vulnerable people and charities that provide ‘essential services,’ with Sunak citing St John Ambulance and the Citizens Advice bureau as two examples of potential beneficiaries. The support comes as organisations like Cancer Research announced in recent days that they would have to scale back their medical research due to a projected drop in donations on which they rely to keep their services going.

The Chancellor’s emergency package for the self-employed is one of the most generous schemes to be offered worldwide so far, covering up to 95 per cent of the UK's self-employed workforce. The details of the scheme, explained here, include a taxable grant worth up to 80 per cent of one’s profits over the past three years, capped at £2,500pm – notably on par with salaried workers who earn, on average, £340 more each month than self-employed workers. There were plenty of potential pitfalls and unnecessary giveaways the Treasury managed to dodge: wary of dishing out cash to super-wealthy contractors and consultants, the Chancellor has only opened the scheme to workers trading with profits up to £50,000.

What does the coronavirus crisis mean for unemployment in the UK and Europe? A study out today from Capital Economics offers a possible answer and if it's bad news for Britain, its worse for those in the eurozone. Here in Britain, the huge economic consequences spurred on by the virus – which will see growth plunge in the second quarter of 2020 – are estimated to cause a sharp, albeit short, spike in unemployment: an estimated rise from 3.

In his third Covid bailout in just over a week, Chancellor Riski Sunak has shifted his focus from businesses to employees with an unprecedented three-month commitment to cover the bulk of pay for workers facing redundancy. He'll cover up to 80 per cent of all salaried workers’ wages (up to £2,500 per month, around the UK’s medium income). This is a blanket pledge, an unprecedented intervention on the part of the government that will see the state pay private businesses – big and small – to retain their employees for the foreseeable future.

The new Bank of England governor Andrew Bailey has warned that the UK is facing an 'economy emergency' and the worst is yet to come. Speaking to Sky News, Bailey said the UK economy needs to brace itself for a ‘very big downturn’. 'Everything's on the table that is reasonable,' he said, referring to the policy tool kit at the BoE's disposal to help manage any economic crisis in the coming weeks and months. The governor’s warning comes a day after Chancellor Rishi Sunak's unprecedented £350bn coronavirus stimulus and hours after the pound plummeted below $1.20 – its lowest level against the US dollar since 1985. Investors are abandoning the pound and flocking to the dollar as they prepare for waves of economic hits across the world.

Last week’s £12 billion stimulus package to tackle the health and economic consequences of Covid-19 now seems like a drop in the ocean compared to Rishi Sunak’s announcement this evening: an astonishing £330 billion package of guarantees for business loans, up to £20 billion worth of tax cuts and grants for small and medium size businesses to stay afloat. As well: a year of full business rate relief for all companies in retail, hospitality and leisure sectors. And, he says, this is only the beginning. The Chancellor needed to indicate to business (and markets) that this Government is serious about keeping the economy going.