OBR’s figures suggest serious consequences for our economy

Just when he thought things were going pretty well at the Treasury Chancellor Rishi Sunak was hit in the solar plexus.

And it came from friends at the independent Office of Budget Responsibility. 

To put it mildly, the OBR painted a shocking scenario of a sharp decline in the UK economy and public finances if the coronavirus pandemic continued for another three months. They claimed the economy could slump by a third and unemployment rocketing, with up to 3.4 million unemployed.

Rishi Sunak was protective saying he believed the economy would bounce back when the lockdown was over.

“It may not be the most likely scenario”, he said. ”But it is important we are honest with people about what is happening with our economy.

“The OBR’s figures suggest that the scale of what we are proposing will have serious consequences for our economy.

“These are tough times and there will be more to come.We can’t protect every business and every household”.

But the Chancellor was nevertheless adamant.

“We are not going  to stand by and let this happen. Our plan is the right plan.

“Right now, the single most important thing we can do for the health of our economy is to protect the health of our people.

“It is not a case of choosing between the economy and public health”.

To put it into perspective, the OBR’s scenario paints the gloomiest possible year for the economy since 1719! It led to the Times political editor asking the Chancellor if this potential slip into a financial chasm would affect the much-vaunted triple lock on pensions.

Rishi Sunak was not being drawn on that, saying that it was not the time to write the Budget.

This was a tough day for the Chancellor. But as companies seek to use his economic lifeboat packages to survive he will face other  difficult days.

The Sun’s political editor asked him about his Furlough payments and when would they arrive to allow companies to pay staff.

He said the Furlough portal would open on April 20 and after a few days of checking money would flow into company accounts.

”You should be able to get the cash before the end of the month”.

That sounds very tight when many companies have an April 25 pay day for staff.

Tough times and business now faces very difficult decisions over the next few weeks.