Chancellor Rishi Sunak has stated that the UK economy will face a “significant recession” this year, and that it is “very likely” to have already begun.

This comes as the Office for National Statistics latest figures showed that the coronavirus lockdown has slashed GDP by 5.8% in March from February, and that GDP was down by 2% overall for Q1 2020, putting the UK economy on the first stage of a recession.

The Chancellor also pointed out that these already poor figures included just the first few days of the impact of the lockdown in March. Having now dragged on into May, and with the government timeline suggesting a continued impact into July and beyond, Q2 then is expected to be far worse.

Head of economics at the British Chambers of Commerce, Suren Thiru, also expects bleak figures for the UK economy, explaining to Reuters; “The speed and scale at which coronavirus has hit the UK economy is unprecedented and means that the Q1 decline is likely to be followed by a further, more historically significant, contraction in economic activity in Q2.”

These worrying figures are the worst since the Lehman Brothers global financial crisis in 2008, and current estimates suggest the current recession will be worse. Following that fall, it took over five years before the global economy recovered to previous levels. Mr Sunak was tight-lipped on any predictions this time round however, saying that it was too early to begin speculating on when the UK economy could hope to see a recovery.

Rishi Sunak

Faced with this overwhelming hit to its economy, the UK government is struggling to find a route to get the country back to work. However, it too is ever mindful of the even more devastating effect a second wave of the Covid-19 pandemic would have.

Even the limited lifting of the coronavirus crisis restrictions in England this week has come in for sharp criticism. This is illustrated by the failure of devolved governments of Scotland, Wales and Northern Ireland in following the English lead. The extension of the government's furlough scheme into October also demonstrates how long it currently expects businesses to be impacted for as a minimum.

The gold price today has risen to a new all time Sterling record of £1,422.06 as more investors lose faith in the stock market, and historically low interest rates push savers to better performing assets. In Dollars, this movement has seen gold rise to $1,735.71 per ounce, the highest since November 2012. With the UK, and the world at large now entering what could be just the first few months of a prolonged global recession, safe haven bullion demand looks likely to continue for some time, and today’s UK price record could soon be beaten.