International Financial News 

UK economy registers deepest recession since records began 

12th August 2020

Records show the UK economy shrank 20.4% between April and June, when compared with the first three months of the year

The UK economy has suffered its deepest recession on record between April and June of this year as the country forms a clearer picture of the impact COVID-related lockdown measures has had.

According to UK media, the country’s economy shrank a staggering 20.4 per cent between April and June, when compared with January to March of this year.

A massive drop in household spending was noted as shops were ordered to close, while factory and construction output also fell.

As a result, the UK experiences its first technical recession – defined as two consecutive quarters of economic decline – since 2009.

According to the Office for the National Statistics (ONS), the UK’s national statistics agency, the economy began to bounce back in June as a result of Government restrictions starting to ease.

Deputy national statistician for economic statistics, Jonathan Athow, is quoted by the BBC has having said:

"Despite this, gross domestic product (GDP) in June still remains a sixth below its level in February, before the virus struck."

The ONS cited the closure of shops, hotels, restaurants, schools and car repair shops as having driven economic collapse.

The services sector, which powers four-fifths of the UK’s economy, suffered the biggest quarterly decline on record.

Factory shutdowns also resulted in the slowest car production since 1954. The economic decline was concentrated in April, at the height of lockdown.

On a month-on-month basis, the economy grew by 8.7% in June, building on growth in May.

Clothes stores, bookshops and other non-essential retailers opened their doors in England on 15th June, while construction work jumped after large declines in the previous two months.

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UK economy registers deepest recession since records began