UK economy suffers record slump with GDP plunging by 20.4%
Written by Gavin on 12th June 2020
Britain’s economy suffered a record collapse during April’s coronavirus lockdown with GDP plunging by 20.4%, the Office for National Statistics said.
The figure is the biggest the UK has ever seen – worse than anything during the financial crash – and underlines the damage caused by the COVID-19 pandemic.
The economy was around 25% smaller in April than it was in February and puts the nation on course for a widely expected recession and the threat of mass job losses.
Reacting to the figures, health minister Edward Argar told Sky News the drop was “clearly a significant contraction” but was “not unexpected” given the COVID-19 pandemic.
Chancellor Rishi Sunak said: “In line with many other economies around the world, coronavirus is having a severe impact on our economy.
“The lifelines we’ve provided with our furlough scheme, grants, loans and tax cuts have protected thousands of businesses and millions of jobs – giving us the best chance of recovering quickly as the economy reopens.
“We’ve set out our plan to gradually and safely reopen the economy. Next week, more shops on the high street will be able to open again as we start to get our lives a little bit more back to normal.”
Jonathan Athow, deputy national statistician for economic statistics, said: “April’s fall in GDP is the biggest the UK has ever seen, more than three times larger than last month and almost ten times larger than the steepest pre-COVID-19 fall.
“In April the economy was around 25% smaller than in February.
“Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.
“Manufacturing and construction also saw significant falls, with manufacture of cars and housebuilding particularly badly affected.
“The UK’s trade with the rest of the world was also badly affected by the pandemic, with large falls in both the import and export of cars, fuels, works of art and clothing.”
CBI lead economist Alpesh Paleja said: “This data confirms what we already knew – that the economy was hit hard as it entered lockdown.
“The government has listened to business’ needs, and reflected them well in the schemes currently in place.
“Going forward, both the Job Retention Scheme and financing support programmes should remain agile and responsive to the evolving economic situation.
“This will leave us well placed to build an ambitious vision for our economic recovery, one that prioritises jobs, investment and tackling pre-crisis inequalities across our society.”