The coronavirus outbreak and the public health measures taken to contain it have delivered one of the largest ever shocks to the UK economy and public finances. In the Fiscal sustainability report, our three medium-term scenarios (upside, central and downside) see the largest decline in annual GDP for 300 years this year, accompanied by an unprecedented peacetime rise in the budget deficit to between 13 and 21 per cent of GDP, and debt rising above 100 per cent of GDP in all but the upside scenario. The pandemic has worsened the baseline against which existing long-term pressures on fiscal sustainability will be felt, and has materially altered our assessment of future fiscal risks.
