The scale and speed of the decline is unprecedented for a single month over the past 15 years and is similar in magnitude to the cumulative falls throughout 2008.

BDO’s Optimism Index, which provides the most comprehensive snapshot of business sentiment by weighting macroeconomic data from the UK’s main business surveys, fell by 21.69 points in March to 79.95.

The fall came as governments around the world reacted to the COVID-19 outbreak by placing economies into lockdown at large scale. This follows a strong rise in optimism in February, as the political and economic uncertainty of 2019 began to subside enabling the UK economy to find its feet.

Resilience in the employment market also saw a sharp decline with BDO’s Employment Index falling by 26.89 points to 85.97. The drop, the first since November 2012, has put an end to the steady growth in the UK job market which has been seen since the financial crash.

Notwithstanding government provisions for furloughing staff, which many companies have taken up, there has been a rise of 950,000 claims for universal credit in the final two weeks of March.

The rise suggests that the unemployment rate could be ready to increase from 3.9% in the three months to January, to more than 6% as soon as next month.

Commenting on the results, Kaley Crossthwaite, partner at BDO LLP, said: “COVID-19 represents a significant threat on many fronts. It is only in the coming weeks and months, as the immediate public health threat passes, that the true scale of the economic impact will be clear, but these early indicators suggest it will be widespread and severe.

“The speed of the decline across all indices reveals how the economic crash caused by COVID-19 is different to the 2008 financial crisis when the fall was spread across multiple months. Businesses have had to act nimbly to make decisions in an unclear timeframe about how to adapt and survive a severe economic shock.

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