COVID 19: UK in recession for the first time in 11 years

Police Bill: A step towards modernization — British High Commissioner

The UK has officially entered into recession after the coronavirus crisis saw the economy contract by a record 20.4 percent between April and June.

It is the first time the UK has been in recession for 11 years, the Office for National Statistics (ONS) has said. The bleak update comes after another ONS update yesterday, warning almost three-quarters-of-a-million jobs had been lost.

The ONS said the economy is still a long way off from recovering the record falls seen in March and April after tumbling into “the largest recession on record”.

Reacting to the news, Shadow chancellor Anneliese Dodds, said: “We’ve already got the worst excess death rate in Europe – now we’re on course for the worst recession too

“That’s a tragedy for our country and it’s happening on the PM’s watch. A downturn was inevitable after lockdown – Johnson’s jobs crisis wasn’t.

Jonathan Athow, deputy national statistician at the ONS, 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.”

But monthly figures showed the economy bounced back by 8.7 percent in June, following upwardly revised growth of 2.4 percent in May, as lockdown restrictions eased. 

READ ALSO: CBN’s exchange rates unification alarms economists, manufacturers

Detailed breakdowns reveal that accommodation and food services was the worse hit as the sector didn’t start reopening until July with output shrinking 86.7 percent across the quarter.

As gathered by Daily Times, the ONS added that this was largest quarterly contraction in the UK economy since Office for National Statistics quarterly economy records began in 1955.

They stressed that the contraction reflects the “ongoing public health restrictions and forms of voluntary social distancing that have been put in place in response to the coronavirus (COVID-19) pandemic.”

In level terms, real GDP was last lower in Quarter two in 2003.

Chancellor Rishi Sunak, said of the figures: “Today’s figures confirm that hard times are here.

“Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will.”

The level of output in June was 16.8 percent below its level a year earlier, compared with a 23.3 percent fall for May, the figures also revealed.  

The drop exceeded the 12.1 percent drop in the eurozone and the 9.5 percent quarter-on-quarter fall in the United States.

About the author

Oluwadamilola Adedeji

Leave a Comment