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Britain could face the worst recession in 300 years if the coronavirus lockdown lasts until the summer, it is feared.

The Chancellor warned of "tough times to come" for Brits amid fears more than two million people could lose their jobs and the economy may fall off a cliff edge because of the coronavirus lockdown.

The Office for Budget Responsibility (OBR) said unemployment could hit 3.4 million - up from 1.3 million - leaving around one in 10 of the working population without a job, while the economy may shrink by 35% between April and June.

The Resolution Foundation think-tank warned the economy was heading for its biggest annual fall in GDP in 300 years – when the war of Spanish succession in 1706 and Western Europe’s great frost three years later hit hard.

Elsewhere, the International Monetary Fund [IMF] projected that the global economy would suffer its worst year since the Great Depression in the 1930s, shrinking by an estimated 3%.

Rishi Sunak emphasised it was just one possible scenario. He said not every business or household could be protected, but that a "bounceback in growth" was expected when the crisis eases.

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(Image: 10 Downing Street/AFP via Getty)

It came as the death toll for patients in hospital who tested positive for coronavirus rose above 12,000, while ministers faced pressure from Labour to publish their lockdown exit strategy this week.

In its first estimate of the economic toll taken by the crisis, the OBR said public sector net borrowing is expected to increase by £218 billion this year, compared with March forecasts, hitting £273 billion, or 14% of GDP.

"That would be the largest single-year deficit since the Second World War," the independent forecaster said.

"The sharp rise in borrowing this year largely reflects the impact of economic disruption on receipts (with smaller effects from policy measures like the business rates holidays) and policy measures that add to public spending (with smaller effects from higher unemployment)."

(Image: AFP via Getty Images)

It based the outlook on a scenario where the lockdown lasts three months followed by a partial lifting for three months, but said, in this case, that there would be a sharp bounceback in the economy, with gross domestic product likely to jump 25% in the third quarter and a further 20% in the final three months of 2020.

Mr Sunak told the daily Downing Street press conference: "These are tough times and there will be more to come. As I have said before, we cannot protect every business and every household.

"But we came into this crisis with a fundamentally sound economy, powered by the hard work and ingenuity of the British people and British businesses.

(Image: AFP/Getty Images)

"So while those economic impacts are significant, the OBR also expects them to be temporary, with a bounceback in growth."

It came as Labour leader Sir Keir Starmer added his voice to calls for the Government to publish its exit strategy from the lockdown this week.

In a letter to Dominic Raab, who is deputising for Boris Johnson, Sir Keir said Labour would support the Government if, as is expected, it keeps the current measures in place.

But he said: "The question for Thursday therefore is no longer about whether the lockdown should be extended, but about what the Government's position is on how and when it can be eased in due course and on what criteria that decision will be taken."

A Government source said talk of an exit strategy before the UK has reached the peak "risks confusing the critical message that people need to stay at home in order to protect our NHS and save lives".

On Tuesday, figures released by the Office for National Statistics showed that 16,387 people died in England and Wales in the week to April 3 - an increase of 5,246 deaths compared with the previous week and 6,082 more than the five-year average.

Covid-19 was mentioned on 3,475 death certificates in the same week, including hospital, care home and community deaths.

But care home providers have warned they are seeing a higher number of cases and deaths than are officially reported, in part due to a time lag with the ONS figures.

The Department of Health and Social Care told the PA news agency on Tuesday lunchtime that there had been coronavirus outbreaks at 2,162 care homes in England.