In the UK, 33% of firms expect the economy to shrink and over 14% expect it to contract by 1-3%. Another 6% believe the UK economy will stay flat with no growth.
In the US, 16% of firms expect the economy will shrink in 2020, most likely by 1-3% (7%) and 6% also expect it to stay flat with no growth.
Dr. Kerstin Braun, President of Stenn Group, stated:
2019 was weaker than expected and the stakes are only higher for 2020. Governments around the world are having to act forcefully to prevent the economic hit from Covid-19 deepening, taking a coordinated approach and opening the liquidity pipe for both fiscal and monetary support.
While a low interest rate provides an important cut in borrowing costs for businesses and consumers at this delicate moment, the coronavirus outbreak will be a real test of the health of the UK and US economies. Lowering rates alone isn’t enough to be effective in offsetting the economic impact of Covid-19. We already know the Chinese economy is going to be hit in the first and second quarter.
For us, the plunge in oil coupled with the economic damage of Covid-19 marked the beginning of a global recession. Our research showed that at the beginning of the year, half of UK and US businesses predicted a recession and a third predicted an international global crisis, and just three months into 2020 and we’re starting to see this play out.
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