Coronavirus crisis causing 'very sharp move into recession', Bank of England governor warns

The coronavirus crisis is pushing Britain towards recession, the Bank of England governor has said.

Andrew Bailey issued the dire warning as official figures showed that just nine days of curbs in March saw the economy shrink by 5.8 per cent, and two per cent overall in the first three months of 2020.

It follows a stark prediction from Chancellor Rishi Sunak that it is “very likely” the UK is facing a “significant recession”.

Mr Bailey said the trends “confirm that we’ve got a very sharp move into recession” as a result of the economy shutting down, adding the bank was “not really surprised”.

He told ITV’s Peston programme that ministers face “choices” ahead over how to weather the economic fallout, but that the cost to the taxpayer could be “spread over time”.

Pressed on whether the Government's ongoing eight week shut down was worth it, he added: “I think were there to be a substantial second wave, it would damage public confidence and it would then obviously rebound back into the economy. So, the Government is right in my view to be duly cautious about that part.

New Office for National Statistics data laid bare the extent of the crisis, showing that the UK’s economic output dropped by almost as much in a single month as in the 18 months after the 2008 financial crash.

Mr Sunak told the BBC: “A recession is defined technically as two quarters of decline in GDP.

“We’ve seen one here with only a few days of impact from the virus, so it is now very likely that the UK economy will face a significant recession this year and we are in the middle of that as we speak.”