Britain has officially entered into recession | Good Morning Britain

  • Britain has officially entered into recession | Good Morning Britain

Britain has officially entered into recession | Good Morning Britain

Britain has suffered the deepest recession among the world's top economies this year, shrinking by a fifth in the second quarter alone when much of the economy was mothballed as part of efforts to contain the coronavirus pandemic.

ONS calculated that GDP grew by 8.7 percent in June as the economy slowly emerged from the lockdown implemented in late March.

"The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record".

But monthly data showed a recovery from the nadir of the recession in April gathered pace, with the economy bouncing back by a better-than-expected 8.7% in June as lockdown restrictions eased. In June its output had recovered to just 6.3pc below its February level, from a peak-to-trough fall of more than one-third.

The second-quarter slump in GDP was nearly exactly in line with economists' in a Reuters poll, and exceeded the 12.1 percent drop in the eurozone and the 9.5 percent quarter-on-quarter fall in the United States. Canada and Japan, the remaining members of the Group of Seven leading industrial nations, have yet to publish their second-quarter numbers but no economist thinks they will be as bad as the U.K.'s.

Finance minister Rishi Sunak said the data "confirm that hard times are here".

After England's hospitality sector, including pubs and restaurants, reopened for the first time in more than three months, UK Health Secretary Matt Hancock said that the vast majority of people did "the right thing".

The 20.4% quarter-on-quarter drop in the April to June period is worse than anything since records began in 1955, the Office for National Statistics said.

"'The dual threats of a second wave and slow progress over Brexit negotiations are also particularly concerning, underlining the need for maximum agility from government on both these issues, allowing a greater focus on the economy's long-term future", he added.

Analysts said the UK's underperformance was partly due to the length of its lockdown, and partly because the consumer-facing services sector that was hardest hit by social distancing has a bigger weight in GDP, accounting for 80 per cent of the economy.

It does not use the two-consecutive-quarters definition for recession and instead counts anything considered to be a "significant decline" in economic output.

The ONS said: "Compared with the end of 2019, the United Kingdom fell by a cumulative 22.1% in the first six months of 2020".

Shadow Chancellor Anneliese Dodds tweeted: "We've already got the worst excess death rate in Europe - now we're on course for the worst recession too".

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A woman wearing a mask to protect against coronavirus, rides a bicycle past a job centre in Shepherd's Bush, as the lockdown to curb the spread of coronavirus continues, in London. "That's a tragedy for the British people and it's happened on Boris Johnson's watch", she said.

"Furthermore, the EY ITEM Club believes there it's unlikely the economy will regain its fourth quarter 2019 size until 2024".

The Bank of England has forecast that unemployment, now at 3.9%, will reach 7.5% by the end of the year as government support schemes set up at the start of the lockdown are withdrawn.