You are here: Home - Investing - Experienced Investor - News -

UK economy shrunk by 2% as pandemic took hold

Written by:
The UK economy shrank by 2% in the first three months of the year, its sharpest contraction since the peak of the financial crisis.

In March alone – the month lockdown started – GDP growth fell by 5.8%, the biggest monthly fall on record, according to the Office for National Statistics (ONS).

The ONS said the arrival of the coronavirus pandemic hit nearly every aspect of the economy.

April’s GDP figures are expected to be even worse as the lockdown was only in place for seven working days in the January to March period.

“With the country in full or partial lockdown well into the second half of the year, the grim economic milestones hit in the latest data will be shattered next time around,” said James Smith, research director at think tank, the Resolution Foundation.

The ONS figures show growth in the services sector fell by a record 1.9% in the first quarter, 2.1% in the production sector and 2.6% in construction.

Suren Thiru, head of economics at the British Chamber of Commerce, said: “The contraction in UK GDP in the first quarter underscores the negative impact that coronavirus had on the economy, even at its earliest stages.

“The speed and scale at which coronavirus has hit the UK economy is unprecedented and means that the Q1 decline is likely to be followed by a further, more historically significant, contraction in economic activity in Q2.”

Two consecutive quarters of negative growth will take the UK into a full-blown recession.


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week