Andrew Bailey has backed forecasts that output in the UK economy had already plunged 35 per cent since the coronavirus lockdown began but went further by warning there could be persistent “scarring” to the economy that would create a lasting hangover.

Speaking on a conference call to journalists on Friday, the Bank of England governor said that the Office for Budget Responsibility’s assessment that gross domestic product had fallen off a cliff in the past month was fair and suggested Britain’s economic plight might be even worse than the picture painted by the British fiscal watchdog.

With Britain facing a long period of pain, he said banks must quickly “sort out” the operational delays in getting loans to small companies. But Mr Bailey warned there also needed to be

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