UK officially in recession.
LONDON, United Kingdom.(News of the South)-The Coronavirus lockdown measures made the UK economy suffer its biggest slump on record between April and June and this pushed the country officially into recession.
By Antonnate S. Mugodi
In the first three months of the year the UK economy shrunk by 20.4%.
UK was pushed into its first technical recession since 2009 by the fact that household spending was plunged as shops were ordered to close while factory and construction output also fell.
Chancellor Rishi Sunak said the government was grappling with something that is unprecedented and that it was a very difficult and uncertain time.
Shadow Chancellor Anneliese Dodds however blamed Prime Minister Boris Johnson for the scale of the economic decline saying that a downturn was inevitable after lockdown but Johnson’s job crisis was not.
The Office for National Statistics said the economy bounced back in June as government restrictions on movement started to ease.
Jonathan Athow, deputy national statistician for economic statistics, said:
“Despite this, gross domestic product 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.
The chancellor has said the economic slump will lead to more job losses in the coming months.
Official job figures released on Tuesday showed the number of people in work fell by 220,000 between April and June.
The UK’s slump is one of the biggest among advanced economies, according to preliminary estimates.
The economy is more than a fifth smaller than it was at the end of last year. This fall is not as bad as the 22.7% decline in Spain, but about twice the size of contractions in Germany and the US.
The Bank of England has noted that social spending, such as eating out, going to a concert or watching a football match, is a bigger driver of growth in the UK than in the US or the eurozone.
“Those kinds of activities comprise a much larger share of our economy than they do for most of our European cousins,” the chancellor said.
The sheer extent and speed of the contraction, though not surprising, reflects an economic hit that has affected every High Street and town and city in the country.
The economy is now growing again, but not all the lights that were dimmed in the spring to protect public health will be turned back on.
Comments
About Author
