The coronavirus-related lockdown caused the UK economy to tumble by 20.4% in the April-June quarter, marking the deepest economic contraction reported by any advanced economy so far. Finance minister Rishi Sunak said the downturn forced many people out of work with many more expected to follow suit in the coming months.
According to official data, Britain’s GDP was 25% below its pre-pandemic size in April and started recovery in May and June, when the economy grew by a monthly 8.7%. However, many economists doubted the sustainability of the rebound. The Bank of England warned of a sharp increase in the unemployment rate and forecast that Britain’s GDP would reach its pre-pandemic level only by the fourth quarter of 2021.
The slump in the second quarter was much worse than the 9.5% drop in the US and the 12.1% fall in the Eurozone. Some analysts said it was because of the timing of Britain’s lockdown which mostly fell in the second quarter. Britain’s economy also relies on domestic consumption which sustained recovery remains remote, according to British Chambers of Commerce economist Suren Thiru.
For the first half of the year, Britain’s GDP fell by 22.1%, data from the Office for National Statistics showed. This is more than double the 10.6% contraction in the US but slightly better than Spain’s 22.7% slump.
