UK economy declines 25% in ‘unprecedented collapse’

The UK’s Office for National Statistics said on Friday that UK gross domestic product (GDP) shrank by 20.4% in April in what was the first full month under the lockdown conditions of the coronavirus pandemic. 

On top of the 5.8% decline in March, this means the UK economy is around 25% smaller than it was in February.

Luke Bartholomew, Investment Strategist at Aberdeen Standard Investments, said: “This is truly the most extraordinary and unprecedented collapse in activity. 

“Combined with the decline in activity we saw in March, the economy has now collapsed by 25%. 

“The good news is that this is likely to mark the trough, with the economy returning to some growth in May as social distancing measures were gradually removed. 

“But it will take a very long time and significant monetary and fiscal stimulus for the economy to climb out a hole this large.”

Jonathan Athow, the UK’s Deputy National Statistician for Economic Statistics, said: “April’s fall in GDP is the biggest the UK has ever seen, more than three times larger than last month and almost ten times larger than the steepest pre-covid-19 fall. 

“In April the economy was around 25% smaller than in February. 

“Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall. 

“Manufacturing and construction also saw significant falls, with manufacture of cars and housebuilding particularly badly affected. 

“The UK’s trade with the rest of the world was also badly affected by the pandemic, with large falls in both the import and export of cars, fuels, works of art and clothing.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.