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How coronavirus has affected the economy – and will there be a recession?


This would be even bigger than The Slump of 1921, when the biggest quarterly drop was just over 12pc, and far steeper than anything seen in the Great Depression.

If the economy stays in lockdown for three months, the official forecasters at the Office for Budget Responsibility think that would hit GDP by 35pc, the biggest hit for more than three centuries.

Which industries are hardest hit?

Each business and industry is feeling this recession differently. Some people can work from home, plugging in a laptop and carrying on almost as normal. Others can do nothing – hairdressers, for instance, or factory production line workers. And some are in between those two extremes.

The OBR expects education to be hit hardest. In its three-month lockdown scenario, it expects output in the education sector to collapse by 90pc.

Accommodation and food services are next – consider all of those closed restaurants and hotels with no bookings – with a fall of 85pc.

Construction faces a 70pc hit as can be difficult for builders to work effectively when two metres apart.

Human health and social activity is at the other end of the scale. The industry’s output is set to boom by 50pc. Healthcare workers and businesses will see a huge spike in their workloads, helping push up their industry’s output by an estimated 50pc

Agriculture will be unchanged, as social distancing is not hard in a field. Financial services are hit very modestly with output due to fall by 5pc, as most of their work can be done remotely.


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