The IHS Markit/CIPS Flash UK Composite Purchasing Managers’ Index (PMI) fell to a record low of 12.9 from 36.0 in March – vastly worse than the weakest forecast in a Reuters poll of economists which had pointed to a reading of 31.4. The UK will issue £180 billion of government debt over the next financial quarter, from May to July – more than it had previously planned for the whole financial year. The country’s national debt is more than exceeds £2trillion and public sector net borrowing could reach 14 percent of GDP in 2020, the biggest one-year deficit since World War 2.

A paper published by the National Institute of Economic and Social Research (NIESR), and authored by David Blanchflower, a Dartmouth College professor and former Bank of England (BoE) policy maker, and David Bell, a professor at the University of Stirling, makes for depressing reading.

In it they write: “What is coming in the labour market looks horrendous.

“We estimate that unemployment will rise by around 5 million workers from 1.34 million to over 6 million by the end of May.”

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Such a figure would represent 20 percent of the work force.

The report adds: “Some of these workers will be furloughed and may return to work if and when there is a recovery, but this will only happen if their companies are solvent and have a market to sell into.

“This becomes a tougher call the longer the lockdown persists.”

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“However, it will likely take much longer for the actual level of overall economic activity to return to pre-crisis norms.”

Victoria Clarke, an economist at Investec, said: “Seeing the numbers in cold hard print and witnessing the depths of the reported falls in output is sobering.

“Whilst the evidence today highlights the depth of the contraction underway, the robustness of any subsequent rebound remains an open question.”

In a statement issued today, the Office for National Statistics commented: “The coronavirus (COVID-19) pandemic is expected to have a significant impact on the UK public sector finances.

“These effects will arise from both the introduction of public health measures and from new Government policies to support businesses and individuals.”

It added: “The full effects of COVID-19 on the public finances will become clearer in the coming months.”

Meanwhile, looking at the international outlook, Chris Beauchamp, Chief Market Analyst at IG, a global leader in online trading, said: “If you had told an investor on 1 January that, within a few months, global PMIs would dive to a fraction of their previous level, they would have thought you mad.

“What is equally confusing perhaps is the way markets seem to have taken today’s incredible readings in their stride, or at least in a relatively calm fashion.

“But then it does not take a genius to infer from the film of deserted European capitals that activity has taken a hit to the solar plexus and will not immediately rebound.

“And with talk of a new ‘Marshall Plan’ for Europe doing the rounds stock markets are doing their best to ‘look past’ all the bad data.”