OBR predicts record contraction

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OBR predicts record contraction of economy The Office for Budget Responsibility (OBR) has warned that the economy could contract by a record 35% by June, with chairman Robert Chote saying this would mark the biggest decline “in living memory". The OBR forecast suggests a three-month lockdown followed by three months of partial restrictions would see an economic decline of 35.1% in Q2, following growth of 0.2% in Q1. If this scenario plays out, the OBR suggests the UK economy would contract by 12.8% this year but get back to its pre-crisis growth trend by the end of 2020, with extra spending by the Treasury in support of the economy set to help limit damage. The budget watchdog has forecast that unemployment will rise to 10%, from the current 3.9%.

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