The British economy is collapsing under a strain of coronavirus; questions go up on the lock output

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LONDON (Reuters) – The UK economy is collapsing under the pressure of coronavirus blockage and government borrowing is rising to the highest levels in peacetime history, increasing pressure on the government to define an exit strategy.

Prime Minister Boris Johnson, recovering in his country home after being gravely ill with COVID-19, faces criticism from opposition politicians and some epidemiologists for reacting too slowly to the new epidemic of coronavirus.

With hospital deaths reaching 18,738, the ministers are working to roll out a mass testing and follow-up program to try to reduce the rate of transmission and perhaps ease tough measures that have virtually shut down the economy.

Ministers find it difficult to explain the high death rates, limited testing and shortage of protective kits, and the reality of the damage to the world’s fifth largest economy, which hit on Thursday.

“We are experiencing an economic contraction that is faster and deeper than anything we have seen in the last century, if not several centuries,” said Jan Vlieghe, interest rate writer at the Bank of England.

Recovery is unlikely to be rapid.

The IHS Markit / CIPS Flash UK Composite Purchasing Managers’ Index (PMI) fell to a new record high of 12.9 from 36.0 in March – not even close to the weakest forecasts in a Reuters survey of economists who had indicated a reading of 31.4.

The UK will issue 180 billion pounds ($ 222 billion) in public debt between May and July, more than it had previously forecast for the whole year.

The country’s debt mountain is over $ 2.5 trillion and its public sector net borrowing could reach 14% of gross domestic product this year, the largest annual deficit since World War II.

A survey by economists at Reuters on Thursday indicated that economic output should contract by around 13% in the current quarter, which would be the largest since the start of records after World War II.

WAITING FOR A VACCINE

The government’s as yet unpublished strategy to break the foreclosure is also under review. Deutsche Bank said the country’s limited testing capacity is an issue.

Workers at the Dropless cleaning company wait to disinfect a London Black Cab as part of a service between the Gett taxi platform and the NHS in south-east London to ensure that patients with symptoms of COVID-19 can get to a local GP without using public transportation as the spread of coronavirus disease (COVID-19) continues, in London, Britain, April 23, 2020. REUTERS / Hannah Mckay

“The UK lags behind almost all the medium to large economies in the world when it comes to coronavirus testing,” said Oliver Harvey of Deutsche Bank in a note to customers.

Health Secretary Matt Hancock has promised to test 100,000 people a day by the end of April. Some 23,560 tests were carried out on April 22 – the last day for which the data is available to the public, and Hancock said Britain now has a test capacity of 51,000.

Britain’s testing coordinator John Newton said on Thursday that the country was on track to meet its target, and Hancock added that the government would extend coronavirus testing to all key workers considered, such as teachers, government employees and delivery drivers.

Previously, only health care workers and those working in nursing homes were able to get tests.

“We can make it easier, faster and simpler for an essential worker in England who needs a test to take a test,” Hancock said at a press conference. “All of this also applies to households of essential workers.”

He said 583,496 tests have been done to date in the UK, and suggested that a large-scale testing, monitoring and follow-up program to keep transmission rates low could lead the way. softening of social distancing measures.

“Testing, tracking and tracing, done effectively, can help suppress transmission in a way that allows you to have lower social distancing rules,” Hancock said at a press conference.

Slideshow (11 Images)

But some restrictions on daily life will likely be necessary for the rest of the year due to the time required to develop and deploy vaccines or find a cure, chief government medical adviser Chris Whitty said on Wednesday.

British scientists started clinical trials of a potential COVID-19 vaccine on Thursday as other vaccine developers across Europe also stepped up work on their own experimental vaccines against the disease caused by the new coronavirus.

Additional reports by David Milliken, Estelle Shirbon, Elizabeth Piper, Andrew MacAskill, Alistair Smout, Kate Kelland, William Schomberg, Paul Sandle, Costas Pitas and Kylie MacLellan; Editing by Michael Holden, Frances Kerry, Emelia Sithole-Matarise, Alexandra Hudson and Stephen Addison

Our standards:Principles of the Thomson Reuters Trust.

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