UK economy shrinks record 20.4%

UK economy shrinks record 20.4% as result of coronavirus lockdown

The UK economy shrank by 20.4% in April as the coronavirus (COVID-19) lockdown paralysed business activity, according to the Office for National Statistics (ONS).

The record month-on-month decline in Gross Domestic Product (GDP) completely eclipsed the previous record contraction of 5.8%, which was recorded in March.

The services sector which constitutes around 80% of the UK’s economic output fell by 19.0% in April. Industrial output fell by 20.3%.

There were also significant falls in the manufacturing and construction sectors, which decreased by 24.3% and 40.1% respectively. In addition, import and export trade with the rest of the world was badly affected by the pandemic, according to the ONS.

Some businesses began to reopen in May, so analysts expect April’s contraction to represent the worst of the impact.

In the three months to the end of April, the UK economy contracted by what the ONS called an ‘unprecedented’ 10.4%, with widespread falls across nearly all industries.

Commenting on the figures, Jonathan Athow, Deputy National Statistician for Economic Statistics at the ONS, said: ‘April’s fall in GDP is the biggest the UK has ever seen, more than three times larger than last month and almost ten times larger than the steepest pre-COVID-19 fall. In April the economy was around 25% smaller than in February.

‘Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.’



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