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"Unprecedented times call for unprecedented policy responses" - Professor Abhinay Muthoo comments on the GDP drop

The UK GDP fell by 20.4 per cent in April, compared with the previous month, according to data from the Office for National Statistics. Professor Abhinay Muthoo, Dean of Warwick in London, comments:-

"This is unprecedented in living memory. It is hugely tragic in so many ways but especially in terms of what it has meant and means for many people’s livelihoods and for many businesses.

"This contraction in UK output arose due to the lockdown that was in place during the month of April, in which large parts of the non-essential economy were shut down. Now that we are slowly easing restrictions, the UK economy is slowly starting to open up.

"The UK Chancellor Rishi Sunak’s approach of “whatever it costs” to support the economy was, and is, the right one to help the economy to recover as fast as it can over the coming months and years, along a potentially V-shaped recovery path.

"The UK Chancellor should continue to be creative - and bold - with economic policy measures, over the coming months and years, to support the recovery and to minimize further adverse impacts on people’s livelihoods. Strong fiscal stimulus should continue in various forms, and there ought to be greater coordination between fiscal and monetary policies. Unprecedented times call for unprecedented policy responses, and “out-of-the-box” thinking on economic policy making and policies, whilst retaining overall credibility."

12 June 2020

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