The COVID-19 crisis pushed the United Kingdom (UK)’s economy into recession, as the Gross Domestic Product (GDP) tumbled to over 20 per cent, the lowest in the known history. The country officially confirmed a recession for the first time since the 2008 financial crisis.
The economists define recession as the decline of GDP in two consecutive quarters. In UK, the first quarter of 2020 saw a 2.2 per cent fall in the GDP. A historic 20.4 per cent fall was seen in the second quarter, between the months of April and May. The Office of National Statistics (ONS) said that June saw an improvement once the government restrictions started to ease. Despite that, the cumulative GDP only plunged.
The economists say that the UK is currently enduring ‘worst-ever recession on record.’ The current slump which caused a recession is deeper than the 2008-09 financial crisis, de-industrialization of the 1980s, and the oil shock of the 1970s.
The huge slump also made UK the worst-performing country in Europe this year. A contraction of 18.5 per cent was recorded in Spain in this quarter.
The UK economy’s overall performance for 2020 will not be confirmed until early next year – although the Bank of England expects an annual fall of 9.5%, which would mark the deepest annual slump since after the First World War in 1921.
UK’s Chancellor of the Exchequer, Rishi Sunak quoted, “I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here. Hundreds of thousands of people have already lost their jobs, and sadly in the coming months, many more will. But while there are difficult choices to be made ahead, we will get through this, and I can assure people that nobody will be left without hope or opportunity.”