There has been a drastic fall in U.K.'s economy which has shrunken by 10% recording abysmal low in 300 years
Unemployement rate in the country is at 10% in third quarter which may increase to 13.2% by 2021
Britain's economy could shrink by more than 14% this year if there is lasting damage from the coronavirus, a scenario that would push government borrowing to nearly half a trillion dollars, budget forecasters said on Tuesday.
The Office for Budget Responsibility, whose projections are used by the government, said tax hikes or spending cuts would probably be needed to fix the huge hole in the public finances.
Nor do they include measures announced by finance minister Rishi Sunak last week that could cost up to 30 billion pounds, which the OBR said would have had a material effect on the borrowing outlook.
An increase in Britain's historically low borrowing costs could leave government finances vulnerable, given the sharp rise in debt, the OBR said.
Even under the most optimistic scenario, the unemployment rate looks likely to peak at almost 10% in the third quarter of 2020, it added, with its downside scenario showing the peak at 13.2% in early 2021.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.