Britain suffers record 19.8pc second quarter contractionBusiness | 30 Sep 2020 3:18 pm
Britain suffered a record collapse in economic output in the second quarter when coronavirus lockdown measures were in force and people had few opportunities to spend, though the decline was slightly smaller than first estimated, Reuters reports.
Gross domestic product shrank by 19.8 percent in the three months to June compared with the first quarter, slightly less than the initial 20.4 percent estimate but still more than any other major advanced economy, the Office for National Statistics said.
The fall was the biggest since the ONS records began in 1955. Other data has suggested Britain is on course for its biggest annual fall since the 1920s.
Britain's economy had already shrunk by 2.5 percent in the January-March period as the country entered lockdown in late March.
Households saved a record 29.1 percent of their income in the second quarter, up from 9.6 percent in the first quarter, as their ability to spend in shops and restaurants were sharply curtailed during lockdown, while incomes were supported by a government job program, which ends next month.
"So far the economic data has proved better than the Bank of England initial assumptions, but with COVID-19 cases returning and restrictions increasing, that could soon reverse," Jon Hudson, a fund manager at Premier Miton, said.
Britain has suffered Europe's highest death toll from the coronavirus, with more than 42,000 fatalities.
Comparing output in the second quarter with its level a year earlier, British gross domestic product is down by 21.5 percent – the same as in Spain – while France reported a 19 percent decline.
Britain's economy has rebounded sharply since the lockdown began to ease from May onwards, and Bank of England Governor Andrew Bailey said on Tuesday that he expected the economy would
show an annual decline of 7-10 percent in the third quarter. However, he warned the expansion was likely to lose pace, with unemployment set to rise to 7.5 percent later this year, some parts of the economy still facing restrictions and headwinds from a recent jump in cases.-Photo: Sky News