UK Economy In 2020 Was Worst Since ‘Great Frost’ Of 1709

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The economy shrank by a record 9.9 per cent in 2020, official figures show. The recovery slowed markedly in the final three months of 2020 as coronavirus restrictions were tightened to deal with a second wave of cases.

Output expanded 1 per cent between October and December, following 16.1 per cent growth in the previous three months, the Office for National Statistics reports.

 

Each of the broad sectors of the economy grew in the final quarter of 2020, as services rose 0.6 per cent, production 1.8 per cent and construction 4.6 per cent. Overall, the expansion was twice as large as forecast.

However, it was not enough to make up for a record plunge in Gross Domestic Product during the first lockdown earlier in the year. The overall decline in output last year was more than twice as deep as in 2009 when the global financial crisis caused GDP to fall 4.1 per cent.

The third round of national lockdowns in the opening months of 2021 is expected to cause the economy to shrink further. Card spending was down in January and businesses reported weaker turnover.

The Bank of England forecasts a rapid rebound in the spring as more people are vaccinated and restrictions are lifted.

Jonathan Athow, ONS deputy national statistician for economic statistics, said: “Loosening of restrictions in many parts of the UK saw elements of the economy recover some lost ground in December, with hospitality, car sales and hairdressers all seeing growth. An increase in Covid-19 testing and tracing also boosted output.

 

-INDEPENDENT

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