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Coronavirus: OBR budget watchdog sees response costs topping £192bn | Business News

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The UK’s budget watchdog has revised sharply higher its projections for the cost of the government’s response to the coronavirus crisis and warned the country remains on track for its worst economic slump in 300 years.

The Office for Budget Responsibility (OBR) said it now expected the chancellor’s support programmes for the economy – bolstered by Rishi Sunak’s summer statement last week – to cost £192.3bn.

That was up from the £132.5bn figure it forecast the previous month.

The OBR, which is independent of government, published the figure alongside a set of scenarios it had created to measure the potential hit to the economy and public finances over the medium term from COVID-19.

They suggested UK output could shrink by up to 14.3% this year in the worst case measure – with the economy not recovering to pre-crisis levels until 2024.

Even under its most optimistic scenario, the OBR sees gross domestic product (GDP) declining by 10.6% this year – the worst performance for 300 years.

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