It has been announced that the UK is officially in a recession, after the GDP fell by over 20% since February this year.
A recession is defined by two consecutive quarters where the GDP fell – it has fallen by 20.4% since February. The GDP is the total value of goods and services produced in a country, so there is no surprise this was heavily hit during lockdown. It’s sort of seen as a benchmark when it comes to the wealth and success of a country, and we’re in our first one since 2008.
The governments tough decisions when it came to balancing people’s safety with economic health has got us here, as lockdown was very harmful to the economy, but in all honesty there was nothing more they could have done.
The Office for National Statistics said: “UK gross domestic product (GDP) is estimated to have fallen by a record 20.4 percent in Quarter 2 (Apr to June) 2020, marking the second consecutive quarterly decline after GDP fell by 2.2 percent in the previous quarter.
“This is the largest quarterly contraction in the UK economy since Office for National Statistics (ONS) quarterly records began in 1955, and reflects the ongoing public health restrictions and forms of voluntary social distancing that have been put in place in response to the coronavirus (Covid-19) pandemic.
Construction was one of the hardest hit industries, with its value falling by a whopping 35%.
Our latest GDP estimates for June show that the UK economy is now 17.2% smaller than it was in February before the full impacts of the #coronavirus #COVID19 pandemic hit https://t.co/8FmcVvX6lz pic.twitter.com/Qgh12prPtt
— Office for National Statistics (ONS) (@ONS) August 12, 2020
“In level terms, real GDP was last lower in Quarter 2 2003. Compared with the same quarter a year ago, the UK economy fell by 21.7 percent.”
Commenting on the figures, ONS Deputy National Statistician for Economic Statistics, Jonathan Athow, said: “The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record.
“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover. Despite this, GDP in June still remains a sixth below its level in February, before the virus struck.
“Overall, productivity saw its largest fall in the second quarter since the three-day week. Hospitality was worst hit, with productivity in that industry falling by three quarters in recent months.”
Economists have also said that the UK has been hit especially hard by the pandemic, but it’s not to say others haven’t too. We have just been hit especially hard because we’re a busy country that never stops working, and to have such a long break without certain services running – it’s no surprise we are where we are.
The ONS said: “Compared with the end of 2019, the UK fell by a cumulative 22.1 percent in the first six months of 2020. This fall was slightly below the 22.7 percent seen in Spain but was more than double the 10.6 percent fall in United States GDP over this period.
“The larger contraction of the UK economy primarily reflects how lockdown measures have been in place for a larger part of this period in the UK compared with these other economies.”
