According to data released by the UK Office for National Statistics (ONS), the UK economy shrank by a record 9.9 per cent in 2020 as COVID restrictions hit.
Responding to the new data, ONS deputy national statistician Jonathan Athow, commented the contraction in 2020 “was more than twice as much as the previous largest annual fall on record”.
The report, which details Britain’s Q4 economic indicators, shows that the economy continued to recover lost ground after its precipitous drop in Q2, but that the rebound was nowhere near as pronounced as it was in Q3.
The UK economy grew one per cent in the last quarter of the year, after growing 16.1 per cent in the previous quarter.
By GDP, the UK economy has been pushed seven years back. The last time GDP was recorded below this level was in the third quarter of 2014.
The data also shows that the UK is lagging far behind its G7 counterparts, significantly underperforming in comparison to the US, France, Germany and Italy.
Speculators, including economist Samuel Tombs of Pantheon, suggested that the economy’s underperformance was predominantly driven by decreased household spending.
During 2020, construction output fell the hardest in the UK, falling 12.5 per cent, followed by agriculture, which fell by 9.4 per cent and services that fell by 8.9 per cent.
The UK is currently back in a national lockdown after an “out of control” strain of the COVID virus saw the country report record figures on consecutive days for daily cases and deaths in January.
Looking to the future, the UK National Institute of Economic and Social Research expects the UK GDP to contract in Q1 2021, before beginning to rebound over the Q2.
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