The Institute for Fiscal Studies has today issued a press release warning of the serious health impacts an economic downturn could have if serious action isn't taken to counteract the problems caused by the current lockdown.

A paper, published by the IFS yesterday, warns of chronic health conditions developing – especially in the form of mental health problems. Those with young children or pregnant will also be hit hardest, due to financial and physical constraints.

In the briefing notes, Heidi Karjalainen, a Research Economist at the IFS and one of the document's authors, said: “The health impacts of the economic downturn caused by the coronavirus pandemic will be felt long after the social distancing measures come to an end.”

Faced with the current Covid-19 crisis the government is set to borrow directly from the Bank of England's 'Ways and Means facility'. Even before the current situation, the UK's gross domestic product had risen by just 0.1% in the three months leading up to February – a troubling sign and one pointing towards an imminent recession.

It will be the first time since the 2008 financial crisis that this facility has been used. Then, the Labour government under Gordon Brown borrowed around £20 billion. In the 12 years since, the debt level had been successfully reduced to £400 million. The current loan, however, looks set to far exceed the previous required aid.

On the April 9th, a statement from the Bank of England described the loan as “a temporary measure” and “a short-term source of additional liquidity to the government if needed to smooth its cashflows and support the orderly functioning of markets, through the period of disruption from Covid-19”.

The BoE added: “The government will continue to use the markets as its primary source of financing, and its response to Covid-19 will be fully funded by additional borrowing through normal debt management operations.”

The Bank is probably referring to the record £45 billion of government bonds, or gilts, that Chancellor Rishi Sunak is likely to issue this month. This will be part of his £200 billion quantitative easing (QE) programme. This huge amount of borrowing is desperately required to support workers and businesses through the current crisis. The debate now is how far governments and their central banks should go.

There is very welcome news that the current restrictions on public liberty is working, as infection rates are slowing in Italy and Spain, but the UK is still at around two or three weeks behind these nations in terms of its infection rate, and so a slowdown won't be seen until nearer the end of April and perhaps into May.

Balancing immediate need against long-term and future debts has always been a problem for politicians. The current unprecedented times bring the question into unpleasant focus. Few of the world's leaders or financiers agree now on where the balance should be struck, with some – like US President Donald Trump – believing that the peak point is near in their respective nations. The worry, as proved by South Korea this week, is that a second or third wave (or spike) in cases might appear as lockdowns subside – causing fresh chaos and anguish all over again.

Whatever the eventual global answer, individual investors are still seeking to protect their wealth in these divided times. The gold price is currently $1,669.46 per ounce; up 4% or $64 per ounce in the last week alone. With mines and refineries closed at present due to the coronavirus, the lack of supply could help drive the price up even higher in the coming weeks.