The gross domestic product (GDP) – the biggest barometer for the health of the UK economy – dropped by over 20% for April, experts have said. This fall far outstrips March’s 5.8% drop, making it the single largest drop since monthly records began in 1997.
Photo: Chris Panas / Pexels
This information is based on data gathered by the Office of National Statistics (ONS), with the body warning that this trend is set to continue, marking a bleak period in British economic history.
This means GDP fell by 10.4% in three months to April and sets the UK on the course to one of its worst quarters in history.
May is expected to fare no better as June will hopefully see the economy begin to reopen again.
Large parts of the British economy went on ice on March 23, when Prime Minister Boris Johnson announced the national lockdown.
These measures were put in place in a hope to stem the spread of Covid-19.
This was met with social distancing measures that made jobs in certain sectors far more difficult to perform.
The manufacturing industry, in particular, has been hit hard due to them having to furlough at least half of their staff, leading to issues with production efficiency.
This has no doubt contributed to the stagnation in the British economy in recent months.
With lockdown measures slowly being relaxed, there is a hope the industry can get itself back to normal with minimal damage.
Experts had been expecting April’s GDP to suffer a significant fall of around 18.7%, according to a consensus compiled by Pantheon Macroeconomics. This proves the drop was more significant than most experts could have hoped.
The ONS themselves admitted the drop in GDP due to coronavirus is “unprecedented.”
Jonathan Athow, the deputy national statistician at the ONS, told BBC Radio 4’s Today programme: “Well, 20% is really unprecedented. Actually, if you take March and April together the fall was 25%. So in two months, the economy shrank by a quarter.”
He added said: “The biggest fall we have seen before was just over 2% – so, it’s 10 times the size of the largest fall we have seen before the coronavirus.
“Virtually every sector has been shrinking.”
Shadow Chancellor Anneliese Dodds warned the UK economy is shrinking at a faster rate than those of other developed countries.
Speaking on BBC Breakfast, Ms Dodds said: “What particularly concerns me is that actually we’re not just looking at one month of economic damage.
“There was a report that came out a couple of days ago from the OECD and it suggested that the drop in GDP for this year for the UK would actually be worse than for every other industrialised nation.
“So we’re in a very, very difficult situation as a country and we will need strong action to help us climb out of this as quickly as possible.”
Back to Homepage
Back to Politics & Economics