Coronavirus inflicts catastrophic damage to economy
Overall, economists expect 15pc of the 9.4 million people who have been put on furlough to lose their jobs – about 1.4 million people.
The jobless rate could hit 11.9pc, the OBR predicts, matching the peak level suffered in the recession of 1984.
Three decades ago that rate took the number of unemployed to more than 3.2 million. Now, with a bigger population, just over four million would be on the dole.
Coronavirus is forcing the structure of the economy to change radically, meaning some jobs and businesses will disappear as high streets are deserted and panicked consumers shun airports and train stations.
Sir Charlie Bean at the OBR said that some retail and leisure businesses are likely to find their business model is no longer viable, with prolonged social distancing making it impossible to run a profit. If no vaccine is found, mask-wearing and shunning human contact may be part of life for decades to come.
He said: “This structural change may imply longer periods in unemployment as workers transfer from those sectors which are contracting to those which are taking their place. That is something which wasn’t so obvious after the financial crisis.
“A lot depends on the pandemic itself. If there is an early resolution of the medical issues, as in our upside scenario, you may need relatively little restructuring of the economy.
“But living with Covid-19 for many years without effective treatment may require a much more fundamental change in the way the economy works.”
