UK economy shrinks a fifth on virus lockdown

Agence France-Presse
UK economy shrinks a fifth on virus lockdown


Britain's gross domestic product nosedives by a record 20.4% in April 2020

LONDON, United Kingdom – Britain’s economy shrank by a fifth in size during April as the coronavirus lockdown shuttered factories, offices, and shops, official data showed on Friday, June 12, stoking concerns over a painful recession.

Gross domestic product (GDP) nosedived by a record 20.4% after a 5.8% contraction in March, the Office for National Statistics (ONS) said.

Taken together, the slump over March and April was 3 times worse than during the global financial crisis of more than a decade ago, the ONS added.

The dire data capped a week of bad news for British Prime Minister Boris Johnson, who faces increasing criticism over his handling of the deadly COVID-19 outbreak as Britain’s death toll surpassed 40,000 people to reach the second highest in the world.

The UK government imposed a lockdown on March 23 – later than many other virus-hit nations – to halt the spread of COVID-19.

It has also backed up employee wages in a costly furlough jobs retention scheme, while the Bank of England (BoE) has injected enormous amounts of liquidity and slashed interest rates to a record-low 0.1%.

“The economy has experienced a significant shock since the start of the coronavirus pandemic,” the ONS said on Friday. 

“GDP has fallen dramatically, with record broad-based falls in output for production, services, and construction,” it added in a statement.

The UK economy shrunk by 2% in the 1st quarter, and another contraction in the current 2nd quarter, or April-June period, would put it in recession.

‘Clearly in deep recession’

Analysts say a recession is likely already underway because of the staggering impact of the virus lockdown and despite Britain gradually easing stay-at-home restrictions.

“The UK is clearly in deep recession – GDP contracted 2% in the 1st quarter and it looks likely to contract at least 15% in the 2nd,” EY economist Howard Archer told Agence France-Presse.

“However, April highly likely marked the low point for the economy and activity appears to have edged up in May as there was some easing of restrictions in England.”

The ONS said pubs, education, health, and car sales were hardest hit areas.

The economy meanwhile shrank by 10.4% in the 3 months to the end of April.

The Organisation for Economic Co-operation and Development this week predicted the UK economy was on course to shrink by more than 11% in 2020 because of COVID-19.

The BoE has warned that the economic paralysis could lead to Britain’s worst recession in centuries amid a broader global economic downturn.


Jonathan Athow, ONS deputy national statistician, described the 20% slump as “unprecedented.”

“April’s fall in GDP is the biggest the UK has ever seen, more than 3 times larger than last month and almost 10 times larger than the steepest pre-COVID-19 fall,” said Athow.

“In April, the economy was around 25% smaller than in February.”

The pandemic, which has blighted economies worldwide, had a “significant and wide-ranging negative impact” on British businesses.

The data comes as Britain presses ahead with its lockdown easing plans.

Non-essential shops and services, as well as zoos, wildlife parks, and drive-in cinemas can open from Monday, June 15, and individual attendance will be allowed at places of worship.

However, restrictions have not yet been lifted on pubs, bars, restaurants, and other leisure facilities. (READ: Mixed fortunes for London shops hit by pandemic)

“April 2020 has experienced sharper falls than March as the negative impacts of social distancing and ‘lockdown’ have led to a significant fall in consumer demand and business and factory closures, as well as supply chain disruptions,” the ONS said.

The UK economy could shrink by as much as 35% in the 2nd quarter, according to a recent forecast from UK fiscal watchdog the Office for Budget Responsibility. (READ: Tax the rich? Post-pandemic recovery idea finds favor in UK–

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