No one can fail to be moved by the tragic tales of tireless public service workers, elderly family members and desperately young people struck down and killed by the scourge of coronavirus.

As our horrendous death toll climbs well past the 10,000 benchmark, I know first-hand people who, without rhyme or reason, have been cut down by this catastrophe.

But as someone who has written about finance for ­several decades, I believe that we cannot ignore the economic and commercial consequences of the lockdown.

Indeed, as the Government’s science advisors meet today ahead of Thursday’s formal review of the strict physical distancing measures, they would do well to recognise the terrifying impact an extended lockdown could have on ­Britain’s financial output, as well as on the standard of ­living of its ­hardworking citizens.

To do so is in no way a betrayal of the Herculean effort of our health workers, whose long hours and sacrifice offer a glimmer of light in these dark times.

Collapse

In fact, it is only sensible to question whether the scale of the impending financial crash could turn out to be even worse — in terms of ­poverty, hunger, domestic ­violence and mental disorder — than the cruelty of the virus itself.

For as the economy heads into the second quarter, April to June, the forecasts have become more dire by the day.

Of course, there can be little doubt that since the disease struck, Sunak has done his best to put in place what he repeatedly described as ‘unprecedented’ measures to stave off financial meltdown

A year which began with the optimism of a ‘Boris bounce’ has rapidly transformed into the year of the coronavirus collapse.

In spite of the lavish £30 billion stimulus offered by Chancellor Rishi Sunak in his first Budget last month, it was yesterday reported he is now warning colleagues that Britain’s Gross Domestic Product — a snapshot of the economy itself — could fall by 30 per cent between April and June.

Put another way, on average each one of us could be one‑third poorer than when the pandemic reached these shores.

In spite of the lavish £30 billion stimulus offered by Chancellor Rishi Sunak in his first Budget last month, it was yesterday reported he is now warning colleagues that Britain’s Gross Domestic Product — a snapshot of the economy itself — could fall by 30 per cent between April and June

As our horrendous death toll climbs well past the 10,000 benchmark, I know first-hand people who, without rhyme or reason, have been cut down by this catastrophe

The scale of that loss of income and the shocking deterioration of the prices of assets, such as homes and shares (which already have taken an almighty hit), doesn’t even bear thinking about.

Even if, as I suspect, Sunak is using a worst case projection so as to persuade reluctant colleagues, such as Health Secretary Matt Hancock, that the full lockdown must end soon, his warnings are not totally unrealistic.

The International Monetary Fund, which will issue new forecasts today, has already warned that the world is ­suffering a slump in output worse than during the Great Depression in the 1930s.

Meanwhile, most private sector economic forecasters have predicted a second ­quarter collapse of 15 per cent for Britain — which, while nowhere near as dire as the Chancellor’s forecast, could still be ruinous.

Of course, there can be little doubt that since the disease struck, Sunak has done his best to put in place what he repeatedly described as ‘unprecedented’ measures to stave off financial meltdown.

Among the key steps was a crucial promise to secure loans for Britain’s 5.9 million small or medium-sized ­businesses, the backbone of the UK economy. But weeks after such a ­promise was made, many small business owners could be forgiven for thinking it was meaningless.

For whichever way you look at the Coronavirus Business Interruption Loan scheme, which nobly guaranteed loans of up to £5 million from a long list of UK banks, it has been a gravely bureaucratic disappointment.

Shameful

Indeed, over the weekend Business Secretary Alok Sharma admitted that, of the 300,000 applications made by troubled small businesses, only 4,200 had received loans, worth £800 million in total. This represents just 1.4 per cent of those seeking help.

To appreciate just how shameful this is, one need only look to the U.S., where, in a similar scheme, one lender alone (Bank of America) has approved 177,000 loans worth £26.1 billion in just over a week.

Over the weekend Business Secretary Alok Sharma admitted that, of the 300,000 applications made by troubled small businesses, only 4,200 had received loans, worth £800 million in total

Much of the blame for the UK’s failure to save its businesses has landed on the doorstep of the British Business Bank — the organisation chosen to guarantee the loans — and the High Street banks.

The banks must take a share of the opprobrium. Indeed, former governor of the Bank of England Mervyn King has been rightly critical of the big banks for keeping branches closed when they could remain open with social distancing.

As one former senior Treasury official told me, his old department is very good at setting the homework but hopeless when it comes to marking the outcomes.

Of course, how to manage this pandemic is a test for every nation. Indeed, countries around the world have already spent an estimated £6.4 trillion in their attempts to keep their ­citizens safe. But is that enough for the British Government to ­justify extending its draconian measures?

Even if, as I suspect, Sunak is using a worst case projection so as to persuade reluctant colleagues, such as Health Secretary Matt Hancock, that the full lockdown must end soon, his warnings are not totally unrealistic

Emergency funding for ­public services in the UK alone — which covers the NHS and the local authorities that provide care services — has reached £14 billion. That is before one takes into account the estimated £40 billion cost for the jobs furlough scheme over three months, the surge in universal credit claims and the loss of income from VAT waivers and the temporary abolition of business rates.

The strain on the public finances is now so great that the Treasury has been forced to ask the Bank of England for an overdraft. With a situation as desperate as this, the Chancellor and Prime Minister will be fully aware they could soon be forced to tackle debts on a scale not seen in peacetime.

If that is the case, the ­financial cuts needed to make that money back would make the post-financial crisis ­austerity programme look modest. Moreover, in a no‑growth or low-growth economy, where prices are falling, the government deficit could loom even larger.

But I don’t say all of this to make you gloomy. For fortunately, there is a possibility it can all be avoided.

I know plenty of economists who now believe that if the Government does not extend this lockdown any longer than is essential to save lives, interest rates remain low and there is an injection of money into the economy, the UK could bounce back by next year.

Pressure

Of course, this will work only if the Government has a ­sensible plan to emerge from our enforced isolation and revive the economy before such damage is inflicted as to wipe out great swathes of business and millions of jobs.

It will be the ultimate test for our politicians, who so far in their commendable effort to save lives and relieve the acute pressure on the NHS, have been prepared to suspend normal free market principles and abandon fiscal rules. It won’t be an easy decision. Indeed, there is talk of substantial divisions within the Cabinet itself.

Just before Easter, Foreign Secretary Dominic Raab gave the strongest indication yet that the lockdown will ­continue at least for several weeks more.

That may well be necessary… but the Government would do well to acknowledge that it cannot go on indefinitely. Or our economy, upon which all our public services depend, will sink into an ever-deepening critical condition.