UK annual GDP to record the biggest decline in 300 years – Eurozone recovery to suffer once jobless schemes end

16 July 2020 (Last Updated July 16th, 2020 11:27)
UK annual GDP to record the biggest decline in 300 years – Eurozone recovery to suffer once jobless schemes end

The UK is set to suffer a major GDP decline due to the coronavirus pandemic at a scale unseen in three centuries. Meanwhile, the Eurozone recovery will be impacted by the end of subsidised jobless schemes. Macroeconomic influencers tracked by GlobalData share the latest updates on the Covid-19 impact on global economies.

Daniel Lacelle

Economist Daniel Lacelle expects the Eurozone recovery to continue to be severely impacted following the end of subsidised jobless schemes citing Bloomberg Economics, which anticipates consumption to fall by 4% in four of the Eurozone’s biggest economies.

The fall in consumption could result in a 1.3% drop in gross domestic product (GDP).

Konstantina Beleli

European Civilization economist Konstantina Beleli retweeted about S&P Global Ratings’ outlook on Kenya’s economy. S&P downgraded its Kenyan rating from stable to negative as the Covid-19 crisis is expected to lead to a significant economic slowdown in 2020.

Kenya’s external debt is expected to remain high over the next three years, according to S&P as quoted by Reuters.

Beleli also retweeted about the UK’s latest GDP growth in May, which improved by 1.8% following a 20.3% fall in April diminishing hopes for a bounce-back with the dominant service sector recovery being weak.

Claudia Sahm

Claudia Sahm, a policy analyst, opines that the US government must continue Covid relief measures to the unemployed until they find work and adds that jobless benefits must be enhanced.

Sahm also says that funding for the CARES Act needs to be increased by three-fold as economic crisis looms in the US causing income loss to 40% of American families and 20% which have lost the major income earner due to the coronavirus pandemic.

Jonathan Davis

Wealth adviser and economist Jonathan Davis retweeted a post which said that the UK’s annual GDP is set to witness the biggest decline in the last three centuries citing the UK Office for Budget Responsibility.

Davis says the government’s pumping money into the economy is going to increase inflation leading to high unemployment resulting from increased cost of doing business, all of which are expected to lead to house prices crash.

However, he doesn’t expect the mortgage rates to fall despite the price fall.