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The UK economy may not bounce back straight away from the shock caused by the coronavirus crisis, Rishi Sunak has warned.
The Chancellor told MPs that the UK should not count on the "V-shaped" recovery predicted by some when the UK went into coronavirus lockdown in March.
He told the Lord’s Economic Affairs Committee that the impact of shutting down many sectors of the economy for months will "obviously" be "severe"
"We are likely to face a severe recession the likes of which we have never seen,” he added. The Government launched a furlough scheme to help businesses pay temporarily laid-off workers 80 per cent of their usual salary.
Rishi Sunak PRU/AFP via Getty ImagesMore than £11 billion has been claimed so far through the scheme, the Treasury revealed on Tuesday.
Meanwhile hundreds of thousands of companies have claimed more than £22 billion in Government-backed loans during the crisis.
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The loan schemes amount to 90 per cent of UK turnover and profit, Mr Sunak said.
He added: "We have the coverage that we want across all our loan schemes, so there isn’t any need for any more changes."
Closed shops in London ReutersThe Chancellor said that the most efficient way of supporting many businesses was to let them reopen.
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And he said that young people are the worst affected by coronavirus job losses, a finding supported by a report from the Resolution Foundation think tank released today.
Mr Sunak added: "It is critical, both for economic and social justice reasons, that we get those people back to work.”