The country's independent budget forecasters said the deficit could hit £273 billion in the 2020/21 tax year, five times its previous estimate and equivalent to 14 percent of gross domestic product, its biggest since World War Two. The Office for Budget Responsibility warned Britain's economy could contract by 35 percent in the April-June period and the unemployment rate could more than double to 10 percent due to the government's coronavirus shutdown.

The projection was based on the assumption that the shutdown lasts for three months followed by another three-month period during which restrictions are partially lifted.

It said the economy could bounce back quickly after the plunge in the second quarter.

The OBR said public sector net debt could exceed 100 percent of GDP during the 2020/21 financial year but end it at around 95 percent of GDP.

Before the crisis, the OBR had forecast debt would be 77 percent of GDP in 2020/21.

It comes after the FTSE 100 opened on the front foot this morning after Easter weekend but analysts have warned of the uncertainties as coronavirus continues to grip the globe.

London's blue chip FTSE 100 index opened at 5842.66, up 0.5 percent this morning after rallying last week on its close. But experts admitted "no one knows what to expect" as the coronavirus crisis continues to spread across the world, with the global death toll nearly surpassing 2million. 

After its inital opening UK stock markets fell as shares in British American Tobacco slumped on report of a US criminal probe. 

The exporter-heavy FTSE 100 was also dragged lower by a stronger pound. 

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2.57pm update: G7 leaders agree to help struggling economies 

G7 finance leaders agreed on the need to provide financial and technical assistance to emerging economies battling with the fallout from the coronavirus pandemic.

The finance leaders of the Group of Seven advanced economies discussed the need for a coordinated response to deal with the damage the health crisis was inflicting on the global economy. 

Japanese Finance Minister Taro Aso said: "There's no doubt the global economy will come under pressure from the coronavirus pandemic."

2.45pm update: FTSE 100 down 

The FTSE-100 index at 2.45pm was down 33.95 at 5808.71.

1.57pm update: Oasis and Warehouse face administration

2,300 jobs are at risk as COVID-19 hits high street after reports Oasis and Warehouse were on the brink of collapse. 

1.46pm update: London Stock Market update

The FTSE-100 index at 1.45pm was down 48.41 at 5794.25.

JUST IN: ‘Something has gone wrong’ Bank of England fears for UK economy

1.19pm update: UK doesn't face choice - Rishi Sunak 

Chancellor Rishi Sunak said the government was not facing a choice between slowing the spread of the coronavirus or protecting the economy.

He told the BBC: "It's clear we must defeat this virus as quickly as possible. 

"That is not a choice between health and economics. That defies common sense.

"What we need is just to follow the rules and I'm grateful to everyone for doing that over the Easter weekend."

It comes after reports of tensions between Mr Sunak and health minister Matt Hancock over the duration of the government's coronavirus lockdown which is hammering the economy.

1.11pm update: Rishi Sunak responds to OBR figures 

Chancellor Rishi Sunak told BBC News:"Well the OBR's independent of Government and as they've said this is just one potential scenario, but I think three points. I think firstly, look, it's clear this will have a very significant impact on our economy and (like) common with economies around the world and it's important that we're honest about that.

"People should know that there's hardship ahead. We won't be able to protect every job or every business as I've said. The second point, it's clear that the report makes clear that the actions we've taken, unprecedented actions will help to mitigate the impact of the virus on our economy and if we hadn't done these things, it would mean that things were a lot worse, for example the impact on unemployment."

11.45am update: FTSE 100 update 

The FTSE 100 index at 11:45am was down 27.94 at 5814.72.T

11.21am update: Warning over how long UK economy can survive

Labour peer and former chancellor Alistair Darling warned the Government had "no alternative but to see this out" in economic and health terms over coronavirus "because the cost of not doing so would be absolutely horrific".

Asked how long the economy could survive the lockdown, he told BBC Radio 5 Live's The Emma Barnett Show: "Well there's a limit, but actually nobody knows what it is because we've not been here before.

"The problem we've got today is that we're not yet on top of this epidemic, we don't know how long it is going to last and the very fact that we don't know whether we're going to have a lockdown continuing for three weeks or maybe beyond that, at least to some extent demonstrates the scale of the problem that we've got.

"What I would say to you though is, the Government has no alternative but to see this out, both in financial terms, economic terms as well as in health terms, because the cost of not doing so would be absolutely horrific."s continues to grip the globe.

11.14am update: US stock futures make gains 

US stock index futures gained on Tuesday as better-than-expected trade data from China and signs some economies might be preparing to ease sweeping lockdowns lifted the mood ahead of the first batch of quarterly earnings reports.

JPMorgan Chase & Co, Wells Fargo & Co and drugmaker Johnson and Johnson are slated to report first-quarter results shortly, with analysts forecasting a torrid season due to the coronavirus pandemic.

Analysts expect a 10.2 percent slide in first-quarter earnings for S&P 500 firms, amid a meltdown in business activity from strict containment measures, according to IBES data from Refinitiv.

The benchmark index has clawed back about 26 percent in the past month, powered by historic fiscal and monetary support and early signs that the crisis was peaking in some US hot spots, but remains about 22 percent below its February all-time high.

10.37am update: Pound on road to recovery - experts

Lee Hardman, currency analyst at MUFG, said: "We're still in this reversal mode where currencies hit hard last month are rebounding.

"The pound was one of the worst performing currencies last month. Britain has a large current account deficit and is seen as vulnerable in crisis conditions - it also performed badly in the financial crisis.

"But we are now moving away from a period of tension and stress in markets, allowing currencies like the pound to gradually recover."

10am update: Pound rises to one-month highs

Sterling rose to one-month highs versus the dollar and euro on Tuesday, as hopes lockdowns may be slowing the spread of the coronavirus pandemic strengthened currencies seen as riskier bets.

The pound has benefited from improved risk sentiment this month as some economies consider reopening and their coronavirus cases slow, even as experts warn Britain may be on course to become the worst-affected country in Europe.

Sterling had slumped to levels not seen since 1985 versus the dollar in March, but it has since rebounded along with other currencies that sold off, such as the Australian and New Zealand dollars.

But this morning the pound reached $1.2575 in early trading, its highest since March 10. It gained to a one-month high of 87 pence per euro.

The euro had been hurt by indecision among euro zone governments on an emergency economic package, although a compromise deal was struck on Friday worth half a trillion euros.

9.12am update: FTSE 100 drops 

The FTSE-100 index at 8.45am was down 18.36 at 5824.30.

Opek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Gains are at jeopardy as the earnings season kicks off this week and no one knows what to expect. 

"Companies themselves are unable to forecast what’s to come in the next quarters.

"The only thing we know is that a worldwide lockdown took a heavy toll on businesses during the first quarter of the year, but unlike past earnings seasons, we have no plausible benchmark in hand to effectively judge and compare the actual results."

The exporter-heavy FTSE 100 was dragged lower by a stronger pound, while stock markets elsewhere in Europe extended last week's strong run on signs some countries were letting businesses get back to work.

Russ Mould, investment director at AJ Bell, said: "While other European markets put their best foot forward amid signs coronavirus cases in countries like Germany, Italy and Spain are hitting a plateau, sentiment remains fragile as investors brace for the corporate first-quarter earnings season to get underway 

UK shares logged their best week since 2009 on Friday, driven by hopes of the coronavirus cases easing in hard-hit parts of Europe and the United States.

8.48am update: Shares in UK-Swedish pharmaceutical company surge

AstraZeneca's shares surged 7 percent after saying it would start a clinical trial to assess the potential of Calquence in the treatment of the exaggerated immune response associated with COVID-19 infection in severely ill patients.

8.40am update: FTSE 100 edges lower 

By 7.28am the blue-chip FTSE 100 index fell 0.35 percent, giving up early gains and underperforming its European peers as the UK government signalled that there would be no easing of lockdown measures this week.

The midcap index was down about 1 percenrt

British American Tobacco shed nearly 4 percent after a report the cigarette maker is under a criminal investigation by U.S. regulators over suspected sanctions-busting.

8.28am update: Australian unemployment rises 

Australia's jobless rate is forecast to spike to the highest level in a quarter of a century because of the coronavirus pandemic. 

Australia has reported a sustained decrease in the rate of new daily coronavirus cases in recent weeks, effectively "flattening the curve" on infections and spurring hope that some of the blocks on public movement might be lifted.

However, Deputy Chief Medical Officer Tim Kelly said officials were still looking at a six month timeframe, ending around September, to maintain rules that have closed businesses across a wide spectrum.

Public meetings of more than two people have been banned and most Australians are required to stay at home unless they have a medical appointment, are going grocery shopping or taking exercise.

Mr Kelly said: "This is not a sprint. This is a marathon."

8.11am update: French economy forecast to contract 

The nation's finance minister warned the French economy is expected to contract 8 percent this year. 

Bruno Le Maire told BFM TV: "We will have a growth forecast of -8 in the updated budget law." The estimate is down from the last predicions of -6 percent flagged on Thursday.

8.09am update: EU shares rise 

Eueopean shares rose on Tuesday after a strong rally last week. 

The pan-European STOXX 600 index was up 1.1 percent after a strong finish last week that was powered by another aggressive round of stimulus and tentative signs of the virus peaking in some hot spots.

In Europe, first-quarter earnings for STOXX 600 firms are expected to decline 15.7 percent, according to IBES data from Refinitiv.

Spanish shares gained 1.5 percent as some businesses re-opened, although shops, bars and public spaces were set to stay closed until at least April 26.

Swedish rare disease drugmaker Sobi jumped 7.6 percent to the top of the STOXX 600 after reporting stronger-than-expected first-quarter earnings as the pandemic spurred higher demand for some of its pharmaceuticals.

8.01am update: FTSE 100 opens 

The FTSE-100 index opened at 5842.66.

7.45am update: FTSE index update 

The FTSE-100 index at 7.44am was unchanged at 5842.66.

7.24am update: UK benefit claims soar

Britain has received about 1.4 million new benefit claims for welfare payments as the coronavirus lockdown stalls swathes of the economy.

British Work and Pensions Secretary Therese Coffey said: "It's now up to about 1.4 million. We are capable of processing and managing those claims."

He said the figure included Universal Credit and job seekers' allowance or employment support allowance.

7.13am update: Bank of Japan set to pump cash into small businesses 

The Bank of Japan will discuss taking further steps to ease corporate funding strains at this month's rate review to pump more money to small firms grappling with slumping sales due to the coronavirus outbreak, sources have said. 

While discussions are still in initial stages, possible options on the table include further increases in purchases of corporate bonds and commercial paper (CP), and an expansion in the range of assets the central bank accepts as collateral in offering financial institutions loans, they said.

A source said: "The focus for the BOJ is still crisis response, not what measures it can take to reflate the economy." 

The BOJ next meets for a rate review on April 27-28.

7.11am update: Pound rallies 

Pound Sterling added 0.4 percent to $1.2562 - their strongest since mid-Marc, while the Australian dollar rose 0.7 percent to $0.6432, the New Zealand dollar firmed 0.6 percent to $0.6131. 

7.06am update: China exports and imports slow decline 

China's exports and imports slowed their declines in March after plunging in the previous two months. 

Financial markets breathed a sigh of relief after customs data on Tuesday showed overseas shipments fell 6.6 percent in March year-on-year, improving from a 17.2 percent slide in January-February, as exporters rushed to clear a backlog of orders after forced government production shutdowns.

Analysts had forecast shipments to drop 14 percent from a year earlier.

Yet, while the trade figures were not bad as feared, analysts say the export and overall growth outlook for the world's second-biggest economy remains grim as the pandemic has brought business activity across the globe to a standstill.

5.51am update: Asia shares jump despite coronavirus pandemic hanging heavy over global outlook

Asian stocks bounced on Tuesday on hopes the coronavirus outbreak may be peaking.

Chinese shares started firm with the blue-chip index .CSI300 up 0.7 percent. Australian shares were up 0.6 percent while South Korea's KOSPI index .KS11 and Japan's Nikkei .N225 each gained 1.4 percent.

Hong Kong's Hang Seng .HSI rose 0.2 percent.

That left MSCI’s broadest index of Asia-Pacific shares excluding Japan .MIAPJ0000PUS up 0.6 percent.

E-Mini futures for the S&P 500 ESc1 were modestly higher, up 0.2 percent.

There is also expected to a close watch on China’s trade data, which is expected to show exports tumbling 14 percent in March from a year ago, as the coronavirus shutters businesses around the world, crippling demand and economic growth.