Mirror Online: LONDON, England – Boris Johnson is being urged to get a grip on both the pandemic and Brexit as a top economist warned that Britain faces hard times until 2023.
The prediction rips apart the Prime Minister’s claim of a swift V-shaped recovery and turns it into a slow L-shaped one.
It means Chancellor Rishi Sunak could have to find £19.2billion a year to pay the universal credit of a predicted four million jobless.
Holger Schmieding, chief London economist of Berenberg bank, says the UK will be a year behind the US and Europe in getting the economy up and running.
And he blamed the PM’s delay in introducing lockdown and Brexit chaos for the economic grind the UK faces.
He said: “Our guess is that the UK will take until early 2023 to get back to where it was in terms of 2019 output.
“Britain has one of the world’s best economies but has made two big mistakes – Brexit and getting the pandemic wrong.
“It has fallen into a deeper hole than Germany and America.
“The recession is lockdown-related and recovery takes longer and is shallower the longer lockdowns last.”
Fellow economist Stephen Pickford added: “If we had locked down sooner the economic impact could have been lessened.”
Shadow chancellor Anneliese Dodds said: “The warning lights are flashing red on the UK economy.
“Ministers still haven’t got a grip. Until they get test, trace and isolate working, people won’t feel confident to go out and our economy won’t recover.”
Latest figures show the UK’s wealth contracted by 20.4 per cent in the second quarter of the year following a 2.2 per cent decline in the first quarter, pitching us into deep recession.
Spain’s economy went down by 18.5 per cent, France 14.1 per cent and Italy by 12.4 per cent.
But Europe’s success story is Sweden which NEVER went into compulsory lockdown and has had only 5,700 Covid deaths and an economy contracting by only 8.6 per cent.
Some experts say if Mr Johnson had followed Sweden’s light touch – kids up to 16 kept in school and pubs and restaurants open – the UK would be £250 billion better off.
To add to our economic woes, a no-deal Brexit on December 31 could cost every British family an additional £2,000 a year.
Even the Bank of England admits we are in for the worst slump in more than 100 years – since the First World War and the great flu pandemic of 1918.
Forecasts by the Office of Budget Responsibility say unemployment will rise to four million next year causing nearly £20billion in dole payments.
But to keep workers on furlough for a year instead would cost the Treasury £80billion.
TUC chief Frances O’Grady said: “The Government claims we can’t afford to carry on supporting jobs but the truth is we can’t afford not to.
“The price of a return to 1980s style unemployment and poverty is too high. Too many families are already living on the breadline.”
Ms O’Grady is calling for a boost to the amount of universal credit boost and for sick pay to be more than £320 a week.
Top economist Mr Schmieding joined Labour in calling on the Chancellor to adopt a more flexible job retention scheme similar to the one Germany successfully introduced after the 2008 banking crash.
That would be cheaper and keep more people on payrolls. Bosses would pay for hours worked with the state topping up wages.
Dr Kemar Whyte of the National Institute of Economic and Social Research said: “There should be an extension to furlough because the big fear is that a spike in unemployment will put further drag on the economy.
“When people lose jobs this affects spending and business confidence.”
The shopworkers’ union Usdaw’s Paddy Lillis said: “Retail employs three million people and we need a stimulus package to save the industry.”
The hospitality sector is facing two million job losses, aerospace has lost 12,000 and 11,000 jobs have disappeared in car manufacturing.
Unite’s Steve Turner said: “We need the automotive industry and its workers if the UK is to turn the challenges ahead into successes.”
The Bank of England predicts unemployment rising from 3.9 per cent to 7.4 per cent which would mean 2.6 million jobless by Christmas.
But critics say that does not take into account a possible further national lockdown to cope with a second corona wave or Brexit disruption.