Uk economy in crisis-historic 20% slump in the economy
UK economy heading for sharpest decline in annual output for 300 years
Britain´s economy ravaged by COVID-19 pandemic has slumped
almost one-fifth (20%) in last three months. The economy is heading for
sharpest decline in annual output for 300 years, official data showed that was released
on Tuesday.
The Office for National Statistics (ONS) said gross domestic
product plunged 19.1 percent in the three months to the end of May "as
government restrictions on movement dramatically reduced economic
activity".
The Office for Budget Responsibility, in charge of the
government´s economic forecasts, said the "UK is on track to record the
largest decline in annual GDP for 300 years", estimating that the economy
could shrink by as much as 14.3 percent in 2020.
Britain's economy shrank by a quarter over March and April
as entire sectors were shuttered by the coronavirus lockdown in what looks
likely to be the bottom of a "catastrophic" crash before a long and
slow recovery.
The economy contracted by 20.4 percent in April from March,
when it shrank by nearly six percent. It was 24.5 percent smaller than in April
2019. Prime Minister Boris Johnson said the figures were no surprise as
Britain's huge services sector was being hit particularly hard by social
distancing measures, but he said recovery would follow.
With much of the economy still mothballed in May and June,
the UK is heading for one of its deepest recessions ever — the Organization for
Economic Cooperation and Development warned that the UK is set to be the
hardest-hit industrial economy this year.
Unemployment has gone up during the pandemic but government
support measures have helped keep a lid on the increase.
Frances O’Grady, general secretary of the Trades Union
Congress (TUC), said targeted support for hard-hit sectors of the economy is
needed, as well as a jobs guarantee to help those who lose work. “The more
people in work, the faster we will work our way out of recession,” she said.
A more detailed look at the figures from the Office for
National Statistics show that all areas of the economy were hit during the
month, in particular pubs, education, and health and car sales.
Jonathan Athow, Deputy National Statistician for Economic
Statistics, said April’s fall is “the biggest the UK has ever seen” and “almost
10 times larger than the steepest pre-Covid-19 fall.”
The government is coming under mounting pressure to relax
the social distancing guidelines, as well, in order to help the economy
recover. In the UK people have to remain 2 meters (6-1/2 feet) apart, which is
more than most countries. The government says the required distance is under
constant review.
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