In this exceptional crisis – akin to a war – the state has no choice but to become an insurer of last resort

The war against the coronavirus is primarily medical, but also increasingly economic. The UK is now in the midst of its worst recession in living memory: the collapse in output has been sharper than during the credit crunch, the ERM crisis, the recession of 1982 or the turmoil of the Seventies.

GDP could fall by a tenth and perhaps by 15 per cent, if only temporarily. Millions are about to lose their jobs, and tens of thousands will have been laid off by the end of the week. Entire sectors of the economy are imploding, with their revenues collapsing by up to 100 per cent.

Rishi Sunak, the Chancellor, should be congratulated for having produced such a comprehensive package of measures so quickly, but we need even more and we need it fast. Every day matters. This is not your usual recession: it was not caused by malinvestment, over-lending, an oil shock or a sudden weakening of demand. It cannot be cured by a Keynesian or monetarist or Austrian recipe: bolstering demand now would achieve nothing in a state of lockdown, and the last thing we need is mass liquidations of healthy firms.