Lloyds warns that second wave of coronavirus cases could send UK into double-dip recession
Lloyds has warned that a second wave of Covid-19 cases could send the UK into a double-dip recession.
Angus Armstrong, chief economic adviser at the bank, has sketched out the impact of infections hitting a second peak in January 2021.
He warned in a presentation to thousands of staff last month that the wave would send another shock through the British economy before it had fully recovered from the spring lockdown.
Warning: A second wave would send another shock through the British economy before it had fully recovered from the spring lockdown
The impact would depend on the size and timing of a resurgence of the virus. It would also depend on whether the UK entered lockdown again, and the scale of any Government support measures. Lloyds has been reassessing its outlook for the economy every three months and expects economic activity to fall 10 per cent this year and rise 6 per cent in 2021.
The briefing came after Lloyds revealed it has swung to a £676million loss and set aside an extra £2.4billion to cover bad loans.
Britain officially went into recession last week. Economic activity, as measured by gross domestic product, sank 20.4 per cent in the three months to June, after a small fall in the first quarter, making this the deepest recession on record.
A Lloyds spokesman said: ‘The outlook remains uncertain and, like all major companies, we run a scenario planning exercise looking at alternative economic outcomes, both positive and negative.