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UK economy suffers biggest drop since 1709


The British economy suffered its biggest decline in more than 300 years in 2020 as the coronavirus pandemic closed shops and restaurants, devastated the travel industry and curtailed manufacturing.


The economy shrank 9.9 per cent last year, more than twice the figure for 2009 at the height of the global financial crisis, the Office for National Statistics said Friday. The drop is the largest since 1709, when a cold spell known as the Great Frost devastated what was then a largely agricultural economy.

The data comes as Britain’s economy remains shackled by restrictions designed to combat COVID-19. A rebound in growth during the fourth quarter has been stifled by England’s third lockdown, which has closed schools, restaurants and non-essential shops since mid-December. Tough restrictions also remain in place in Northern Ireland, Scotland and Wales.

“Today’s figures show that the economy has experienced a serious shock as a result of the pandemic, which has been felt by countries around the world,” the UK’s top treasury official, Chancellor Rishi Sunak, said in a statement.

“While there are some positive signs of the economy’s resilience over the winter, we know that the current lockdown continues to have a significant impact on many people and businesses.”

Sunak said he would announce new plans to protect jobs and bolster the economy when he delivers his annual budget statement to the House of Commons on March 3.

COVID-19 has hit Britain’s economy harder than most other industrialised democracies. French GDP shrank 8.3 per cent last year, Germany 5 per cent and the US 3.5 per cent.

The GDP figures show the breadth of the pandemic’s economic impact in Britain.

The service sector, which accounts for about 80 per cent of the UK economy, shrank 8.9 per cent last year, with output from accommodation, food and beverage businesses down more than 55 per cent from February levels. Manufacturing fell 8.6 per cent and construction 12.5 per cent.

In hopes of relaxing the restrictions that have devastated the economy, the UK has moved to rapidly vaccinate its most vulnerable residents. More than 13.5 million people, or about 20 per cent of the population, had received at least one dose of COVID-19 vaccine by Wednesday.

Read More at https://www.financialexpress.com/economy/uk-economy-suffers-biggest-drop-since-1709/2193630/

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