The coronavirus pandemic has led to a 3% drop in global trade values in the first quarter of 2020, according to the United Nations Conference on Trade and Development.
The downturn is expected to accelerate in the second quarter, according to UNCTAD forecasts, which project a quarter-on-quarter decline of 27%.
International Monetary Fund researchers have written in a blog that relying on monetary policy alone to respond to shocks from events such as Covid-19 might not be enough and also raise questions about side effects on future financial stability and threats to central bank independence:
“While keeping an eye on debt sustainability concerns over the long term, fiscal policy needs to play a larger role. Putting in place more automatic fiscal responses in advanced economies could help build their resilience to future adverse shocks.
“If rules for fiscal stimulus are well communicated and established before shocks occur, they can help shape expectations and reduce uncertainty, thereby dampening the drop in activity once a negative shock materialises.”
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The UK Office for National Statistics said that in April there was a 69.1% month-on-month increase in the number of claims for Jobseeker’s Allowance, taking the level to over 2 million.