Business & Economy

Coronavirus pushes UK into recession for first time in 11 years

London, Aug 12 (efe-epa) .- The United Kingdom has officially entered a recession for the first time in eleven years after the country’s gross domestic product (GDP) dropped by 20.4% between April and June, the second consecutive quarterly contraction in the year.

The Office for National Statistics (ONS) said on Wednesday that all sectors of the British economy had suffered a decline as a consequence of the confinement imposed by the Government to contain the spread of Covid-19, which has already claimed more than 46,000 lives and infected some 313,000 people in the island nation.

According to the ONS, the contraction in the second quarter is the largest ever recorded in the UK.

“The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record,” Jonathan Athow, ONS Deputy National Statistician, said.

In the first quarter -January to March-, the British GDP dropped by 2.2%, but the economic decline worsened from April as the country suffered an economic halt due to the confinement.

The worst-hit businesses in the second quarter were accommodation and food services with an 86.7% drop. Wholesale and retail trade fell by 20% and transport by 30%.

Education also suffered a blow with a 34.4% contraction.

Construction saw a decline of 35%, while production output fell 16.9% between April and June.

Household consumption fell by 23.1% as people were forced to stay in their homes to stop the spread of the pandemic.

“Some types of household consumption are likely to be particularly affected while social distancing is in place, especially those types of spending that are more reliant on physical interaction with other people or those that relate to travel,” the ONS analysis read.

According to data released by the ONS on Wednesday, GDP dropped 20.4% in April but increased by 2.4% in May and 8.7% in June, when some of the coronavirus measures were slowly lifted and eased.

“The economy began to bounce back in June, with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover.

“Despite this, GDP in June still remains a sixth below its level in February, before the virus struck,” Athow said. EFE/EPA


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