A drop in the gross domestic product of 20.4% in the second quarter of the year: the bill presented by the coronavirus in the United Kingdom between April and June is the worst in Europe. This data was expected by analysts. But it is still increasing in quarterly decline since the government began to collect these data systematically in 1955. With the second-quarter GDP data, the United Kingdom also officially entered a technical recession after GDP fell by 2.2% in the first quarter: this is the first recession since 2009, with the financial crisis.
Official data showed a record contraction in the second quarter due to the lockdown measures put in place to combat the coronavirus pandemic, which Boris Johnson’s government introduced late compared to other countries. Compared with the April-June period a year ago, the decline was 21.7%, even worse. However, the British economy in June grew by 8.7% compared to the previous month. “The economy began to recover in June with the reopening of stores, factories that have begun to increase production, and residential construction continues to recover,” said statistician Jonathan Athow.
The number of people employed in the United Kingdom decreased by 220,000 in the three months. Following the closure of the country due to the coronavirus pandemic. The number of people in employment fell to 32.92 million. So far, Britain has been partially spared from the sharp rise in unemployment recorded in the United States due to the government’s Coronavirus Job Retention Scheme, which pays most of the salaries of workers not laid off. But companies are skeptical of prospects, and unemployment is likely to increase significantly towards the end of this year when the worker support program ends.
According to the National Bureau of Statistics, Britain suffered the highest number of deaths in Europe, with over 50,000 deaths related to the disease between March 1 and June 30. “The recession caused by the coronavirus pandemic has led to the largest quarterly GDP decline ever recorded,” added Jonathan Athow of the National Bureau of Statistics. Last week the Bank of England predicted that it takes until the last quarter of 2021 for the economy to resume its former numbers, and warned that unemployment would rise sharply.
Great Britain entered lockdown at the end of March, after the other European countries, which means that the British economy contracted less than the euro area in the second quarter compared to the first three months of the year. The National Bureau of Statistics stated that in the first six months of 2020, British GDP fell by 22.1%, slightly less than the contraction of Spain (22.7%), but more than doubled compared to 10.6% of the United States.
The contraction in the United Kingdom economy mainly reflects how the lockdown measures during this period. Non-essential shops in England did not reopen to the public until June 15, and pubs and restaurants closed until July 4. However, some sectors of the economy appear to be heading for a rapid recovery. Retail sales data for June shows that spending, excluding fuel, is above the previous year’s levels, and overall consumer spending is close to pre-crisis levels in July.
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