UK’s GDP Shrinks By 20.4% As Economy Enters First Recession In 11 Years

The economy of the United Kingdom suffered its biggest decline in the second quarter of this year as coronavirus induced lockdown forced the country into its first recession in 11 years.

The economy, according to figures from Office for National Statistics on Wednesday shrank by 20.4 per cent compared with the first three months of the year.

The development has plunged the UK into its first technical recession since 2009 when the country experienced the negative impact of the global financial crisis.

A technical recession is defined as two straight quarters of economic decline.

The huge decline in GDP was due to the devastating effects of the coronavirus pandemic.

The pandemic had led to unprecedented drop in global crude oil prices.

The outbreak of the deadly virus globally had resulted in the lockdown of many cities including the UK, a development that has paralyzed economic activities.

So far, the very visible
impact has been huge, especially in relation to government finances, capital flow reversals and loss of income to businesses and households.

The stark announcement from the Office of National Statistics comes just a day after it was revealed that nearly one million jobs had already been lost during the UK’s Covid-19 lockdown.

The Deputy National Statistician at the ONS, Jonathan Athow, said that the recession brought in by the pandemic had led to the huge fall in the GDP numbers.

Athow said while the economy began to bounce back from the month of June, the negative impact of the crisis was still being felt.

He said, “The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record.

“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover.

“Despite this, GDP in June still remains a sixth below its level in February, before the virus struck.

“Overall, productivity saw its largest-ever fall in the second quarter. Hospitality was worst hit, with productivity in that industry falling by three-quarters in recent months.”

The statistics agency said there had been record quarterly falls in services, production and construction output in the second quarter of this year.

The falls have been particularly prevalent in those industries that have been most exposed to government lockdown restrictions.