UK economy crumbling under virus lockdown in worst crisis in a century

The UK's economy is crumbling under the strain of the coronavirus lockdown and government borrowing is soaring to the highest levels in peacetime history.

UK economy crumbling under virus lockdown in worst crisis in a century

The UK's economy is crumbling under the strain of the coronavirus lockdown and government borrowing is soaring to the highest levels in peacetime history.

Prime Minister Boris Johnson, recuperating at his country residence after being seriously ill with COVID-19, is facing criticism from opposition politicians and some epidemiologists for reacting too slowly to the novel coronavirus outbreak.

Ministers are already struggling to explain high death rates, limited testing and shortages of protective kit, and the grim reality of the damage to the world's fifth-largest economy hit home on Thursday.

Bank of England interest-rate setter Jan Vlieghe said the damage was worse than anything Britain has experienced in the past hundred years at least.

"We are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries," Vlieghe said.

The recovery, he said, was unlikely to be swift.

The IHS Markit/CIPS Flash UK Composite Purchasing Managers' Index (PMI) fell to a new record low of 12.9 from 36.0 in March - not even close to the weakest forecast in a Reuters poll of economists that had pointed to a reading of 31.4.

The UK will issue STG180 billion ($A348 billion) of government debt between May and July, more than it had previously planned for the entire financial year.

The country's debt mountain exceeds $US2.5 trillion ($A3.9 trillion) and its public sector net borrowing could reach 14 per cent of gross domestic product this year, the biggest single year deficit since World War II.

A Reuters poll of economists on Thursday pointed to a roughly 13 per cent contraction in economic output in the current quarter, which would be the largest since records began after World War II.

The government's as yet unpublished strategy for unwinding from the lockdown is also under scrutiny.

Deutsche Bank said the country's limited testing capacity is a problem.

"The UK is lagging behind almost any medium-to-large economy globally when it comes to coronavirus tests," Deutsche Bank's Oliver Harvey said in a note to clients.

Health Secretary Matt Hancock has promised to get 100,000 people per day tested by the end of April, though just 23,560 tests were carried out on April 22 - the latest day for which data is publicly available.

A total of 425,821 people have so far been tested and 583,496 tests have been carried out in total in the UK.

Restrictions on everyday life are likely to be needed for the "next calendar year" due to the time needed to develop and roll out vaccines or find a cure, the government's chief medical adviser Chris Whitty said on Wednesday.

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Source : 9 News More   

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'It would be a shame if premature hope punishes us all'

European leaders have against complacency as countries reopen amid historic economic downturns and threats of a second pandemic wave.

'It would be a shame if premature hope punishes us all'

As unemployment in the United States swelled to levels last seen during the Great Depression of the 1930s, the World Health Organisation has also predicted Africa may be the next coronavirus epicentre and the UK has begun human vaccine trials involving thousands of people.

The coronavirus has killed over 184,000 people worldwide, including about 47,000 in the United States alone, according to a tally compiled by John Hopkins University from official government figures.

The true numbers are almost certainly far higher due to nations struggling with testing capabilities.

The United States

More than 4.4 million laid-off workers applied for unemployment benefits last week, the government said Thursday.

In all, roughly 26 million people — the population of the 10 biggest US cities combined — have now filed for jobless aid in five weeks, an epic collapse that has raised the stakes in the debate over how and when to lift the state-ordered stay-at-home restrictions that have closed factories and other businesses from coast to coast.

In the hardest-hit corner of the US, evidence emerged that perhaps more than two million New Yorkers have been infected by the virus — several times higher than the number confirmed by lab tests.

A small, preliminary statewide survey of around 3000 people found that 13.9 per cent had antibodies suggesting they had been exposed, Governor Andrew Cuomo said.

Just in New York City, with a population of 8.6 million, Health Commissioner Oxiris Barbot said many as one million may have been exposed.

The economic consequences of national shutdowns have also sparked angry rallies in state capitals by protesters demanding that businesses reopen, and President Donald Trump has expressed impatience over the restrictions.

Some governors have begun easing up despite warnings from health authorities that it may be too soon to do so without sparking new infections.

In Georgia, gyms, hair salons and bowling alleys can reopen Friday. Texas has reopened its state parks.

Few experts foresee a downturn as severe as the Depression, when unemployment remained above 14 per cent from 1931 to 1940, peaking at 25 per cent. But unemployment is considered likely to remain elevated well into next year and probably beyond, and will surely top the 10 per cent peak of the 2008-09 recession.

Europe

Meanwhile, the European Union has pledged 20 billion euros ($33.8 billion) to help vulnerable communities globally.

EU leaders scheduled a virtual summit Thursday to take stock of the damage the crisis has inflicted on the bloc's own citizens and to work out an economic rescue plan.

While the health crisis has eased in places like Italy, Spain and France, experts say it is far from over, and the threat of new outbreaks looms large.

"The question is not whether there will be a second wave," said Dr. Hans Kluge, the head of the WHO's Europe office.

"The question is whether we will take into account the biggest lessons so far."

German Chancellor Angela Merkel criticized some German states for moving too briskly in trying to reopen their economies. Germany has been praised for its approach to the pandemic and has a much lower reported death toll than other large European countries.

"We're not living in the final phase of the pandemic, but still at the beginning," Merkel warned.

"Let us not squander what we have achieved and risk a setback. It would be a shame if premature hope ultimately punishes us all."

The United Kingdom has started a coronavirus testing program described as "one of the biggest virus infection and antibody studies that (the) country has ever seen."

Health Secretary Matt Hancock said in a daily COVID-19 media briefing on Thursday that 25,000 people in the UK will be approached to take part in the joint program conducted by the University of Oxford and the Office for National Statistics.

"In total, 25,000 people will take part in the first phase, with plans to expand it to up to 300,000 people over the next 12 months," he said.

Governments are also bearing that risk in mind with the onset of Ramadan, the holy month of daytime fasting, overnight festivities and communal prayer that begins for the world's 1.8 billion Muslims with the new moon this week.

Many Muslim leaders have closed mosques or banned collective evening prayer to ward off new infections.

The virus has already disrupted Christianity's Holy Week, Passover, the Muslim hajj pilgrimage and other major religious events.

Asia, Africa

In Africa, COVID-19 cases rose 43 per cent in the past week to 26,000, according to John Nkengasong, director of the Africa Centers for Disease Control and Prevention.

The figures underscored a recent warning from the World Health Organisation that the virus could kill more than 300,000 people in Africa and push 30 million into desperate poverty.

Meanwhile, authorities in the capital of Indonesia, the world's most populous Muslim-majority nation, extended its disease-fighting restrictions to cover all of Ramadan, Turkey banned communal eating during the holiday.

Pakistani Prime Minister Imran Khan bowed to the country's religious clerics, refusing to close the mosques despite a warning from the nation's doctors that such gatherings are like a petri dish for spreading the virus in a country with a fragile health care system.

Source : 9 News More   

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