“Based on the early indicators, and based on the experience in other countries that were hit somewhat earlier than the UK, it seems that we are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries,” Vlieghe said in a speech delivered online.
“The economy’s potential is severely disrupted at the moment, but once the pandemic is over, and other things equal, in principle it should return approximately to the pre-virus trajectory.”
But he also said a slow, U-shaped recovery was more likely than a quick, V-shaped rebound.
The monthly IHS Markit/CIPS Flash UK Composite Purchasing Managers’ Index (PMI) showed the extent of the damage.
It fell to record low of 12.9 from 36.0 in March – not even close to the weakest forecast in a Reuters poll of economists, a reading of 31.4. The picture was similar in France and Germany.
“Like those across Europe, these are shocking figures,” said ING economist James Smith, who predicts it will be 2022 at the earliest before Britain’s economy recovers to its pre-outbreak size.
Another survey showed manufacturers were more pessimistic about the outlook than at any time since records began in the 1950s.
A Reuters poll of economists pointed to a roughly 13% contraction in the current quarter, the largest since records began after World War Two.
Data company IHS Markit said its figures raised questions about the cost of the lockdown and how long it will last.
“Seeing the numbers in cold hard print and witnessing the depths of the reported falls in output is sobering,” said Investec economist Victoria Clarke.
