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United Kingdom Officially Falls into Recession Since the 2009 Financial Crisis

The UK economy suffered its biggest slump on record between April and June as coronavirus lockdown measures pushed the country officially into recession.

The economy shrank 20.4% compared with the first three months of the year.

Household spending plunged as shops were ordered to close, while factory and construction output also fell.

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

The Office for National Statistics (ONS) said the economy bounced back in June as government restrictions on the movement started to ease.

Jonathan Athow, deputy national statistician for economic statistics, said: “The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding 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 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.

April proved the biggest drag as it was the first full month of curbs on non-essential businesses and services but was followed by month-on-month growth of 2.4% in May and 8.7% during June, the figures suggested.

Data covering July showed 730,000 fewer people on payrolls since the lockdown started with well-known names such as John Lewis, Boots, M&S, British Airways, WH Smith and Debenhams among those cutting jobs to date, to save costs.

In its update on the economy, 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.

 

Source:BBC News, United Kingdom ONS