UK Economy Contracted by Record-Breaking 20.4% in April
The fast escalation of the COVID-19 pandemic and resultant lockdown measures saw the UK’s economic output fall by the sharpest margin since records began.
New figures released by the Office for National Statistics (ONS) found that the UK economy shrank by an unprecedented 20.4%, its largest monthly downturn in history.
The contraction was more than three times greater than March 2020’s shrinkage of 5.8%, the previous record-holder. Analysts had expected April’s figures to be the bleakest of the crisis, as UK-wide lockdown measures were imposed in late March and began to be eased in May.
Jonathan Athow, Deputy National Statistician at the ONS, outlined the scope of the contraction. “In April the economy was around 25% smaller than in February,” he said. “Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.”
Some of the most significant falls were observed in the manufacturing and construction sectors, which declined by 24.3% and 40.1% respectively. The UK’s services sector, which makes up around 80% of the country’s economic output, plunged by 19% in April, while industrial output fell by 20.3%.
Morten Lund, an economist at Nordea Markets, remarked: “We've gotten used to really bad numbers, but this is breathtaking.” He also noted that the UK was “looking worse” when compared to its peers in the G7.
The new release follows predictions by OECD that the UK will be among the nations hardest hit by the economic impacts of COVID-19, with an estimated decline of 11.5% in GDP provided that a “second wave” of contagion does not occur.