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Britain suffers record 20 per cent hit to GDP

Image credit: Joe Giddens/PA Wire/PA Images

Britain suffers record 20 per cent hit to GDP

Britain’s economy has suffered the largest monthly contraction on record as the coronavirus sent vast swathes of the country into shutdown, new figures show.

Official figures released by the Office for National Statistics (ONS) on Friday show that gross domestic product (GDP) fell by 20.4 per cent in April compared to March.

That marked the largest monthly fall since records began in 1997, with the ONS saying it reflected “record widespread falls in services, production and construction output”.

The latest data are the first to cover a full month of the coronavirus lockdown, with the ONS saying the impact of the curbs on many aspects of ordinary life had “led to a significant fall in consumer demand and business and factory closures, as well as supply chain disruptions“.

The GDP plunge of more than a fifth was, the stats body said, “the month, the largest fall since monthly records began in 1997”.

Making clear the scale of the economic downturn, the ONS added: “The monthly decline in GDP in April 2020 is three times greater than the fall experienced during the 2008 to 2009 economic downturn.

"During the global financial crisis, from the peak in February 2008 to the lowest point of March 2009, a total of 13 months, GDP contracted 6.9 per cent.

“Between March 2020 and April 2020, GDP has fallen by 20.4 per cent, equivalent to a fall of approximately £30bn in Gross Value Added.”

The service sector saw a 19 per cent fall in April 2020, the figures show — again a monthly record, while the construction industry experienced a 40.1 per cent decline.

Sports, recreation, accommodation, food, and the cultural sectors ware particularly hard hit, the ONS survey found, with at least 75 per cent of businesses in these sectors saying they had “temporarily closed or paused trading”.

Responding to the figures, James Smith of the Resolution Foundation economics think tank said: “Today’s release lays bare the devastating impact that the coronavirus crisis is having on the economy, with a fall in output more than nine times bigger than the previous record.

“But while this contraction is unprecedented, it is not unexpected. Shutting down large parts of our economy inevitably means big falls in economic activity.

“This is why the first priority for policy makers was to protect people and firms from that impact with significant policy announcements. But looking ahead, policy can shape how much lasting damage is done and this underscores the need for different, but equally bold, further economic policy measures in the months ahead.” 

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