UK economy may not recover until end of 2022, Treasury forecaster warns

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GDP would shrink 12.4% and unemployment more than double in one scenario as budget deficit hits £322bn

It could take until the end of 2022 for Britain’s economy to return to its pre-coronavirus peak, while government borrowing is expected to surge to £322bn this year in response to the pandemic, the Treasury’s official forecaster has warned.

Dashing hopes for a rapid recovery from Covid-19 after official figures revealed a meagre rebound in May, the Office for Budget Responsibility (OBR) said it would take longer than previously hoped to bounce back, while warning some degree of long-term economic scarring was increasingly likely.

Related: Hopes for V-shaped recovery fade as UK economy grows 1.8% in May – business live

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