UK economy plunged into deep recession, shrinking 20.4% between April and June
London:
The UK economy plunged into a deep recession, shrinking 20.4% between April and June at the height of the coronavirus lockdown, according to new figures released today.
Reacting to data from the Office for National Statistics (ONS), British Chancellor Rishi Sunak admitted he said “hard times” had been warned and many more jobs would be lost.
“I have said before that hard times are ahead, and today’s numbers confirm that hard times are here,” Sunak told Sky News.
“Hundreds of thousands of people have already lost their jobs, and unfortunately, in the months to come, many more will. But even though there are still hard choices to be made, we will get there, and I can assure people that no one will be left without hope or opportunity, ”he said.
This is the first time in 11 years that the UK has slipped into a recession, which is defined by two consecutive three-month periods of declining GDP. The latest GDP figures released by the ONS showed it fell 20.4 percent between April and June, after falling 2.2 percent between January and March.
“The recession triggered by the coronavirus pandemic led to the largest quarterly GDP decline on record,” said Jonathan Athow, deputy national statistician at the ONS.
“The economy started to rebound in June, with stores reopening, factories starting to ramp up production and housing construction continuing to recover. Despite this, GDP in June is still one sixth below its level. in February, before the virus hits, ”says Athow.
“Overall, productivity experienced its sharpest decline in the second quarter. The hotel industry has been the most affected, with productivity in this sector falling by three quarters in recent months, ”he said.
The sharp drop in production was largely due to the lockdown-induced shutdowns of stores, hotels, restaurants and schools, with the service sector experiencing the largest quarterly decline on record. On a month-to-month basis, the economy grew 8.7% in June, building on growth in May.
Industry groups have urged the government to act against a feared second wave of the deadly coronavirus as well as Britain’s exit from the European Union (EU), which will come into full force at the end of the Brexit transition period from January 2021 and from a future UK. – The EU trade agreement is still under negotiation.
“This confirms the economic shock caused by the essential public health measures put in place to contain Covid-19. With population movements limited in the second quarter, it is no surprise that sectors like hospitality, arts and entertainment suffered the brunt of the blockage, ”said Alpesh Paleja, senior economist at the Confederation British Industry (CBI).
“It is encouraging to see that the economy grew in May and June, indicating that the early stages of a recovery are underway. Yet cash flow constraints still weigh heavily on businesses, and with the pandemic not going away anytime soon, a sustainable recovery is by no means assured. ,” he said.
The dual threat of a second wave and the slow progress in Brexit negotiations are also of particular concern, underscoring the need for maximum agility on the part of the government on these two issues, allowing for greater focus on l long-term future of the economy, ”he added. .
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
