The United Kingdom has entered the deepest recession since records began as the economy shrank by more than any other G7 nation during the COVID-19 outbreak.
This is UK’s first recession in 11 years.
The Office for National Statistics (ONS) said gross domestic product (GDP), the broadest measure of economic prosperity, fell in the second quarter by 20.4% compared with the previous three months – the biggest quarterly decline since comparable records began in 1955.
This plunged the UK into its first technical recession, defined as two straight quarters of economic decline since 2009.
Confirming the onset of the deepest recession since records began, the ONS said the decline in the second quarter was widespread, with a dramatic plunge in output across the services, production and construction industries. Reflecting the public health restrictions and forms of voluntary physical distancing in response to Covid-19, it said the pandemic had erased 17 years of economic growth in just two quarters – taking the level of GDP back to the equivalent position in June 2003.
Jonathan Athow, the deputy national statistician for economic statistics, said the economy bounced back in June after the monthly gross domestic product (GDP) expanded by 8.7% following growth of 2.4% in May 2020, but it wasn’t enough to recover the lost output earlier in the year.
“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover.
“Despite this, gross domestic product (GDP) in June still remains a sixth below its level in February, before the virus struck.”
The ONS said the collapse in output was driven by the closure of shops, hotels, restaurants, schools, and car repair shops.
The services sector, which powers four-fifths of the economy, suffered the biggest quarterly decline on record, the report said.
The construction sector was particularly badly hit, after building sites were shut down during the height of the lockdown.