Shocking but no surprise!
The UK economy shrank by a record 20.4% in April 2020 due to the damaging affects of lockdown. The monthly decline was outlined in figures reported by the Office for National Statistics (ONS).
The GDP fall is three times greater than the decline seen during the whole of the 2008/2009 financial crisis, and is the biggest GDP fall ever recorded in the UK.
The ONS also published figures for the three months February to April, which showed a decline of 10.4%. Almost all areas of the economy were affected, from education, health, hospitality, pubs and car sales all contributing to this historic fall.
Manufacturing and construction also saw substantial falls, house building and car manufacturing were badly affected.
The UK’s global trade was also badly affected by Covid-19 too, with large falls reported in the import and export of cars, fuels, works of art and clothing.
Recession
The UK’s economy was already shrinking before the April GDP figures were announced. Data demonstrated that it contracted by 2% in the first three months of 2020 and with only a few days of virus impact. The UK is in recession.
Slow recovery
Given that lockdown measures started to be eased in May – it stands to reason that April should mark the GDP trough – it can’t get any worse than this, can it? Hopefully we are now past the worst.
The recovery will be slow, as restrictions are lifted gradually and as businesses and consumers continue to exercise caution.
The fear hasn’t left for many and a second pandemic wave still threatens on the recovery horizon.