UK falls into recession as GDP plunges by a record 20.4% in second quarter

UK Prime Minister, Boris Johnson

New Delhi (NVI): The United Kingdom’s economy contracted by 20.4 per cent in the second quarter of 2020, the worst quarterly slump on record, pushing the country into the deepest recession of any major global economy.

This crash in GDP in the April-June period, compared with the first quarter, is the worst since quarterly records began in 1955. Industries most exposed to government lockdown measures to contain the coronavirus pandemic — services, production and construction — saw record drops.

Household spending plunged as shops were ordered to close, while factory and construction output also fell.

This pushed the UK into its first technical recession – defined as two consecutive quarters of economic decline – since 2009.

The second-quarter plunge is the worst on record and follows a 2.2 per cent contraction in the first quarter.

Britain’s recession is deeper than those recorded by comparable economies in Europe, notably Germany, France and Italy, or that of the United States.

There were signs of a recovery in the month of June alone when Gross Domestic Product (GDP) grew by 8.7 per cent from May, according to the Office for National Statistics (ONS).

UK’s economic output in June was 16.8 per cent below its level a year earlier, compared with a 23.3 per cent fall for May.

In addition to this, the British government hopes additional measures such as the reopening of pubs and restaurants and a return to offices will further fuel the recovery.

-CHK