Fears have quickly intensified after the latest closely-watched data from IHS Markit and the Chartered Institute for Procurement and Supply revealed the purchasing managers’ index (PMI) has plunged at its fastest rate on record this month. The composite reading fell to just 12.9 from 36 last month, with services taking a huge hit, with that index plummeting to a record low of 12.3. A reading below 50 signals contraction.
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But worryingly, the same rapid downward trend is also inflicting huge damage across the continent, with the eurozone’s latest PMI falling from an already all-time low of 29.7 in March to just 13.5 in April.
Earlier this month, Chancellor Rishi Sunak warned the economy could shrink by as much as 35 percent in the current April to June period.
IHS Markit chief business economist Chris Williamson said: “Business closures and social distancing measures have caused business activity to collapse at a rate vastly exceeding that seen even during the global financial crisis, confirming fears that GDP will slump to a degree previously thought unimaginable in the second quarter due to measures taken to contain the spread of the virus.”
Howard Archer, chief economic adviser to the EY Item Club, described the outlook in the short term as “very worrying”, warning the Government now has a huge job on its hands to effectively implement its recently launched Job Retention Scheme.
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The UK economy is collapsing under the strain of the coronavirus lockdown (Image: GETTY)
Rishi Sunak has warned GDP could plummet by as much as 35 percent in the April to June quarter (Image: PA)
He said: “Forward-looking elements of the survey are very worrying for near-term activity at least.
“The record fall in services and manufacturing jobs reported by the purchasing managers highlights the importance of the Government’s coronavirus job retention scheme and the need to ensure that it is effectively implemented.”
The CBI has also revealed a significant decline in manufacturing activity, with the organisation’s industrial trends survey showing new orders and output over the past quarter is falling at the fastest rate since 2009.
There is an expectation the next quarter will also be the weakest on record, as the continued coronavirus lockdown continues to inflict devastating damage on businesses, jobs and the wider economy.
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Businesses are buckling under the strain of the coronavirus lockdown (Image: GETTY)
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A new survey from GfK has also revealed that consumer confidence is sinking fast.
The index plummeted to a score of -34 in April, down from -9 in March, before the full impact of the coronavirus pandemic had been realised.
Earlier this month, financial experts told Express.co.uk the UK economy is “certain” to crash into recession due to coronavirus.
But the TaxPayers’ Alliance warned hiking taxes on Britons to pay for the huge amounts being spent fighting the killer pandemic would be “totally disastrous”.
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Hiking taxes on Britons would be ‘totally disastrous’ (Image: GETTY)
Euroepan stock markets have been plummeting amid the continued coronavirus lockdown (Image: GETTY)
There are increasing fears the nation could plunge into a massive recession – deeper than the 2009 financial crisis and one of the most severe since 1900.
Forecasts are warning economic contraction could soar beyond six percent this year, compared to 4.2 percent during the financial crisis in 2009, and a deeper contraction than during the Great Depression more than a century ago.
Sam Packer, media campaign manager at the TaxPayers’ Alliance, warned: “The absolute last thing the country will need during or after this crisis is higher taxes.
The International Monetary Fund is expecting a swift economic recovery (Image: EXPRESS)
“Taxpayers are already facing the highest tax burden in fifty years.
“It would be totally disastrous to put already strained household budgets under further strain.”
He added: “To boost the economy, we would be far better off freezing council tax and lowering personal tax rates to make sure people have more of their own money to spend.”