Preliminary figures released on Wednesday have shown that the UK economy contracted by 20.4% in the second quarter of 2020, compared to the previous three months, as COVID-19-induced lockdowns affected economic activities.
GDP (gross domestic product) expanded by 8.7% in June as government lockdown measures eased, having shown a meek 1.8% recovery in May following April’s 20.4% contraction.
The second-quarter plunge is the worst on record and follows a 2.2% contraction in the first quarter. Analysts had expected a fall of 20.5%, according to a Reuters poll. Two consecutive periods of contraction mean the British economy is now in a technical recession.
Services, construction and production all saw record quarterly falls, particularly in the sectors most exposed to government restrictions, according to the Office for National Statistics (ONS).
ONS Deputy National Statistical for Economic Statistics Jonathan Athow said:
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.
In level terms, real GDP was last lower in the second quarter of 2003, while compared with the second quarter of 2019, the UK economy tumbled by 21.7%.
The ONS noted that its estimates are subject to greater uncertainty than usual, owing to the difficulties faced in data gathering due to public health restrictions.
Meanwhile, The UK’s slump is also 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 around twice the size of declines 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 America or the eurozone.