Britain’s economy shrank by a record-breaking 9.9% in 2020, new figures by the Office of National Statistics show, highlighting the impact of Covid-19 restrictions, employment uncertainty and reduced demand, with limited growth in the final quarter narrowly avoiding a double-dip recession.
KEY FACTS
The 9.9% annual contraction is more than twice that seen in 2009 in the aftermath of the global financial crisis, and narrowly worse than the 9.7% slump during the crisis of 1921. The U.K. economy contracted by 9.9% in 2020, its largest annual contraction since the Great Frost of 1709, as the coronavirus pandemic ravaged economic activity.
Though the economy grew 1% in the last quarter when looser restrictions boosted the services industry, overall output was down 7.8% from the last quarter of 2019, the ONS said. The slump is twice that of the 2009 financial crisis and is possibly the worst in 300 years, with models from the Bank of England suggesting a decline of 13% during the Great Frost of 1709.
Some Positives:
While there are some positive signs of the economy’s resilience over the winter, we know that the current lockdown continues to have a significant impact on many people and businesses,” Rishi Sunak said, adding that his focus “remains fixed on doing everything we can to protect jobs, businesses and livelihoods. Strict public health measures and a resurgent wave of Covid-19 infections driven by a dangerous new variant of the virus have the U.K. economy likely falling again in 2021. While the U.K. has the worst coronavirus death rate in the world, it also has one of the best vaccination records, priming the country for an economic comeback.
