Coronavirus: More than half of Brits expect recession within 12 months

More than half of Britons expect recession within a year on the back of Covid-19’s “tremendous” downward effect on the global economy, a new survey has found.

Edinburgh's Princes Street, which like many other areas has seen shops, cafes and restaurants closed. Photo by Mark Scates/SNS Group.

The latest analysis from YouGov and the Centre for Economics and Business Research (CEBR) said “unprecedented” measures from the Treasury to shore up businesses and protect jobs “appear to be doing little to protect consumer confidence, despite adding billions to the nation’s debt”.

It found that 52 per cent believe Britain’s economy will be in recession within a year, and just one per cent were optimistic that the economy would flourish.

Falling confidence

Additionally, consumer confidence has slumped 4.2 points to 103.3, charting the biggest monthly fall since the wake of the Brexit referendum in July 2016 and a low not seen since 2013. It is the second consecutive fall, which interrupted a short-lived period of recovery that came after “Brexit confusion became clarity following the General Election”.

The data also revealed that 49 per cent of those surveyed said they would save an unexpected windfall for a later date, and 28 per cent would use it to pay down debts. Just 16 per cent would immediately spend it.

Oliver Rowe, director of reputation research at YouGov, commented: “With unprecedented government measures to crack down on the spread of Covid-19 shutting small and large businesses across the country and confining Britons to their homes, it’s unsurprising that consumer confidence has been knocked. But with little prospect of a solution in the next couple of months Britons are starting to believe that the economy will slide into recession or depression.”

Kay Neufeld, head of macroeconomics at the CEBR, said: “Government-mandated closures of non-essential shops, pubs, restaurants and other establishments will have a devastating effect on several industries and in particular on the leisure and hospitality sectors.

“It is now highly likely that the economic crisis will lead to an increase in unemployment and a reduction in household incomes in the coming months, although the government and the Bank of England are working hard to soften the blow. To limit the economic damage from the crisis, it will be crucial to get the pandemic under control as quickly as possible.”