Accountancy giant PWC has warned the coronavirus could lead to a 7.8% decline in UK GDP this quarter, making the fallout much sharper and faster than during the financial crisis in 2008.
Nick Forrest, head of PwC’s economics and policy arm, said recent GDP projections were the worst he had seen in his 22-year career.
“What’s striking about this is the quarterly impact because this crisis is going to be so sharp in the current quarter. I’ve seen plenty of commentators even talking about double-digit falls. The biggest drop quarter on quarter in the financial crisis was 2.1%, so this is a far sharper drop than we’ve experienced before.
“In the financial crisis things stayed open, it was just the demand was quite low. This is going to feel very very sharp.” Forrest has estimated that GDP will fall by 4.7% for 2020.
He added there is evidence business investment has already fallen 30%, which is again worse than the credit crunch when in the UK it dropped 15%.
Forrest believes key manufacturing and logistics businesses must stay in operation as large swathes of the economy, including retail, entertainment, leisure and travel sectors, will go into lockdown.