EconomyStockUK GDP collapsed slightly less than first thought in second quarter

2 years ago565 min
imageEconomic Indicators44 minutes ago (Sep 30, 2020 02:35AM ET)

(C) Reuters. People wearing protective face coverings walk past an empty retail unit following the outbreak of the coronavirus disease (COVID-19), in Manchester, Britain

LONDON (Reuters) – Britain’s economy shrank by a record 19.8% in the second quarter of 2020 when COVID-19 lockdown measures were in force, a slightly smaller decline than an initial estimate of a 20.4% fall in output, official figures showed on Wednesday.

Output during the three months to the end of June was 21.5% lower than a year earlier, the Office for National Statistics said.

Britain has suffered Europe’s highest death toll from COVID-19, with more than 42,000 fatalities.

Britain’s economy also contracted more in the second quarter alone than that of any other major advanced economy.

This partly reflects how elsewhere in Europe, more economic damage came in the first quarter due to earlier lockdown measures in countries such as Italy, France and Spain.

Comparing output in Q2 with its level a year earlier, Spain also reported a 21.5% drop and France a 19.0% decline, similar to Britain’s performance.

Britain’s economy has rebounded sharply since the lockdown began to ease from May onwards, and Bank of England Governor Andrew Bailey said on Tuesday that he expected Q3 GDP data would show an annual decline in the range of 7%-10%.

However, he warned the expansion was likely to lose pace, with unemployment set to rise, some parts of the economy still facing COVID restrictions and headwinds from a recent jump in cases.

Due to regional spikes in COVID, much of Britain is under a partial lockdown which limits people’s ability to meet others not in their households – hitting the hospitality sector in particular – though schools and workplaces remain open.

UK GDP collapsed slightly less than first thought in second quarter

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