Amid the fear of a second wave of Coronavirus infections during winters in the UK, economic experts have expressed concerns over a sharp fall in the country’s GDP later this year. Notably, as the government gradually eases its lockdown restrictions to recover from the socio-economic repercussions of the pandemic, the British economy is rebounding more slowly than expected.
According to media reports, the UK economy grew only 1.8% in May as compared to the previous month with the resumption in the economic activities in the country. However, economic experts have warned that the GDP will likely witness an approximate 13% taking note of the concerns related to a second Coronavirus wave. Economists also suspect that a second pandemic wave can intensify economic uncertainties in the country.
According to the Office for National Statistics (ONS), the UK economy is critically 24.5% smaller than it was in February. The ONS further added that May’s GDP fell by 19.1% in the three months to May. While economists were expecting a 5% economic growth with the resumption of business activities, they have expressed disappointment over such a dismal growth rate.
Economic expert Richard Hughes has reportedly stated that the intensifying pandemic crisis will send the UK economy into an ‘exceptional economic shock’. He further warned that the country’s GDP is expected to fall between 10-13% in 2020. Hughes has recently been nominated by Chancellor Rishi Sunak as a prospective new chair of the UK’s budget watchdog- Office for Budget Responsibility’s (OBR).
This development has come days after Chancellor Sunak announced a package of measures to support jobs in every region of the country in a bid to boost business and economic activities. He also called for an expansion of the green sector for the simultaneous welfare of the environment and economy.
Significantly, Sunak has taken cognizance of the discouraging economic growth rate, asserting that figures underline the scale of the challenge the administration is facing.
Earlier in June, the International Monetary Fund (IMF) had also predicted that the UK economy is likely to shrink by 10.2% this year due to the economic slowdown triggered by nationwide pandemic shutdown. Economists have also raised concerns about the permanent impact of the Coronavirus pandemic on the UK economy.
British Chambers of Commerce (BCC) head of economics Suren Thiru has also maintained that while the UK economic output may show growth signs in the short term as the government eases restrictions, this slow recovery will possibly dissipate when the economic scarring induced by the pandemic will start to bite. It will significantly more intense when government support will start diminishing.
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