Never before in world history has economic activity fallen so quickly.

In the wake government-imposed lockdowns, the United States unemployment rate more than trebled in a single month, rising to 15%. In the UK more than four out of five retail outlets closed their doors (at least temporarily).

Yet the government-imposed recession has also seen the government step in to support consumers and firms on an unprecedented scale. One quarter of workers currently have their wages paid by the government via the furlough scheme.

The announcement on Tuesday 12 May of a further extension of the furlough until at least the end of October could see the total cost rise to in excess of £80bn. Currently, the scheme costs approximately £15bn per month, an enormous cost only a little below the monthly cost of the NHS budget.

At the same time, the government is underwriting the lending of hundreds of billions of pounds to firms small and large in the hope of avoiding mass unemployment and business closures.

The support for consumers and firms has gone further than ever before, notably much further than after the global financial crisis of 2008, and the legacy of the pandemic will have long-lasting, possibly irreversible, effects on the UK economy.

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