UK local authorities are set to be hardest hit financially by the coronavirus among the five largest European economies says a report from Moody's Investors Services.

The research estimates a shortfall of €77bn for local and regional government across the UK, Germany, France, Spain and Italy, with Spain and the UK facing the highest fiscal pressures. The report says: ‘Spanish regions and UK local authorities face relatively high spending pressures, moderate expected lost revenues and weak pre-pandemic fiscal performance.