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COVID-19: UK slumps into recession, first time in 11 years

COVID-19: UK slumps into recession, first time in 11 years

 

The UK has officially slumped into recession for the first time in 11 years due to the impact of the COVID-19 pandemic.

The country’s Office for National Statistics revealed that the UK gross domestic product (GDP) is estimated to have fallen by a record 20.4% in 2nd Quarter of 2020, marking the second consecutive quarterly decline after GDP fell by 2.2% in the previous quarter 2020.

This launched the UK into its first technical recession, defined as two straight quarters of economic decline since 2009.

The deputy national statistician for economic statistics Jonathan Athow, 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 house building 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 report said.

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.

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