UK economy suffers biggest GDP decrease on record

COVID-19: Impact on the UK economy
COVID-19: Impact on the UK economy

In April, the economy of the United Kingdom suffered its worst monthly contraction considering that records began in 1997, shrinking by 20.4 per cent.

“April’s fall in GDP is the biggest the UK has ever seen, greater than 3 times larger than last month as well as virtually 10 times larger than the steepest pre-COVID-19 autumn.”

Speaking on BBC Radio 4’s Today Programme, the deputy national statistician for economic data observed that, while every part of the economy had actually been impacted by the Covid-19 dilemma, the biggest contributors to the record slump were declining activity in “pubs, education, health and cars sales”. Output for the food services and lodging sector fell by around 92 per cent on its pre-COVID-19 levels, while the arts and also recreation sector witnessed a 47 per cent decline.

This chart shows the UK GDP monthly index from 1997 to 2020.

The UK has been one of the countries worst-affected by the novel coronavirus break out, with more than 41,000 deaths and also 291,000 confirmed instances. The lockdown measures enforced to restrict the spread of the pandemic compelled mostly all non-essential services to shut and the nation’s employees to remain at home.

With practically two decades of development wiped out in 2 months, Britain’s economy is set to reduce by 15 per cent this year. Such an event has not taken place for 3 centuries.

Through its furlough scheme, the UK government has thus far been able to stay clear of the astronomic out of work figures seen in the USA. However, when this support group is finally relaxed, a significant spike in joblessness is widely anticipated.

The gradual easing of lockdown procedures has buoyed market sentiment somewhat. In the coming weeks, pubs are set to resume while cleaners, plumbing technicians, electrical contractors as well as various other workmen will be permitted to return to work.

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