The UK economy is set to be the hardest hit by coronavirus among the world’s developed countries, according to the Organisation for Economic Co-operation and Development.
In its latest global economic outlook, the OECD predicted Britain’s economy was likely to slump by 11.5% in 2020.
The OECD also warned that if there was a second peak of the Covid-19 pandemic, the UK economy could contract by 14% this year.
It is understood the UK is likely to hit hard because the economy relies so heavily on the services sector. The sector makes up 80% of the UK's economic activity.
The OECD’s UK forecasts also warned that the Government’s furlough scheme would “probably not be able to fully offset lasting effects on employment”.
At the same time there are growing worries over the UK's relationship with Europe and the rest of the world. The UK has not yet signed a free trade agreement with the EU and as a result could be subject to WTO trade tariffs.
The body expects the world economy to contract by 6%, with all countries suffering a deep recession and cautioned that the recovery will be slow.
A double-hit scenario where there is a second wave of Covid-19 would see global GDP drop by 7.6% and the recovery would be even slower next year, added the OECD.
