UK GDP takes record 20.4 percent plunge as COVID-19 roils economy

The British economy suffered a massive contraction from April to June as the coronavirus pandemic plunged the UK into its worst recorded recession, officials said.

The country’s gross domestic product plummeted by 20.4 percent in the second quarter, the biggest decline since officials there started keeping quarterly records in 1955, the Office for National Statistics said Wednesday. That followed a 2.2 percent drop in the first three months of the year.

The quarter-to-quarter tumble was worse than other big economies in Europe and roughly twice as bad as the record 9.5 percent plunge the US recorded for those three months as restrictions aimed at controlling COVID-19 brought economic activity to a near-standstill.

“It is clear that the UK is in the largest recession on record,” the Office for National Statistics said in a Wednesday bulletin.

“Our latest estimates show that the UK economy is now 22.1 percent smaller than it was at the end of 2019, highlighting the extent of this recession.”

The UK’s second-quarter contraction was driven by a 20 percent drop in GDP in April, the month after Prime Minister Boris Johnson shuttered pubs, gyms, theaters and other businesses to prevent the deadly virus from spreading.

The economy began to recover in June as GDP increased 8.7 percent that month, “with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover,” Office for National Statistics official Jonathan Athow said.

Nevertheless, the UK’s plunge was larger than its peers in the Group of Seven, a bloc of the world’s largest economies.

Germany’s GDP tumbled 10.1 percent last quarter, while France’s shrank 13.8 percent and Italy’s dropped 12.4 percent. Japan and Canada have not released second-quarter figures but economists doubt they will show a contraction as big as the UK’s.

Separate data released Tuesday indicated that UK payrolls shed about 730,000 jobs from March to July. But the nation’s official unemployment rate was stable at 3.9 percent “because of increases in people out of work but not currently looking for work,” the statistics office said.

The UK has also suffered more than 46,000 COVID-19 deaths, according to a Johns Hopkins University tally, more than any other European country.

With Post wires

Source: Newzandar News

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