UK OBR's reference scenario is for 35% drop in real GDP in Q2, then bounce
|The UK's Office for Budget Responsibility is for a fall of 35% in real Gross Domestic Product in the second quarter of 2020 due to coronavirus. The OBR stresses this is not a forecast. The bounce would consist of a leap of 25% in the third quarter and 20% int he fourth one. Overall, the UK economic output would fall by 13% in 2020, worse than world wars and GDP.
Unemployment is set to rise by two million and public borrowing to leap to £273 billion, which would be 14% of GDP. That would be the worst deficit since WWII. Estimates about the economic damage of COVID-19 vary and investors are relying on partial data. The UK publishes first-quarter GDP figures only in early May.
GBP/USD is trading around 1.2540 after the publication by the OBR, marginally lower.
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