Britain has officially been declared in recession for the first time since the 2008 financial crisis according to official figures charting the impact of the coronavirus crisis on the economy.
The Office for National Statistics (ONS) reported that the essential suspension of activities through the COVID-19 lockdown meant gross domestic product (GDP) slumped by 20.4% in the second quarter of the year following a dip of 2.2% during the first three months of 2020.
The ONS twitted that “Our latest GDP estimates for June show that the UK economy is now 17.2% smaller than it was in February before the full impacts of the COVID-19 pandemic hit”
It is gathered that, by the end of June, the economy was a sixth below February’s pre-crisis level although May began a monthly recovery for growth which gathered further momentum during June.
The ONS also pointed to a record fall in productivity during the second quarter of the year, as more than nine million workers were placed on furlough. ONS deputy national statistician Jonathan Athow said: “The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record.”
“Overall, productivity saw it’s largest-ever fall in the second quarter. Hospitality was the worst hit, with productivity in that industry falling by three-quarters in recent months.”
It comes after separate data showed around 730,000 jobs in the UK had been lost since March when the coronavirus lockdown began, bringing the economy to a near standstill. John Lewis, Boots, M&S, British Airways, WH Smith and Debenhams are among the pool of well-known names cutting jobs to save cos
Economists have pointed to the UK being particularly exposed because of its reliance on consumer spending with Chancellor Rishi Sunak warning there was “worse to come for employment;
“I said hard times were coming and today’s numbers show that hard times are here. Hundreds of thousands of people have already lost their job and many more will.”
“What I would say though is difficult decisions do lie ahead for all of us but I want to reassure people we will get through this and nobody will be left without hope and opportunity. And as people get back to going shopping, or going out for a meal, or indeed getting back to their office, they will see that it’s a new normal, it’s a safe normal.” He however assured.
The Bank of England said last week that while it expects the downturn to be less severe than first feared, the UK could take longer to recover than previously thought .It forecasted GDP to shrink by 9.5% this year, having warned in May of a 14% fall in 2020.
The International Monetary Fund (IMF) predicts the recession will be over next year and the world economy will start bouncing back, but no one knows how strong that recovery will be.
The plunge in GDP currently leaves the UK second only to Spain in suffering the worst hit to output, among major economies, during the first six months of the year.