The United Kingdom has officially plunged into what its called deepest recession due to the coronavirus crisis
The economy falls into it’s deepest recession for the first time in 11 years, according to the figures released by the Office of National Statistics (ONS) on Wednesday, showing that the economy shrank 20.4% from April to June when compared with the first three months of the year.
This follows a fall of 2.2% from January to March, The Office For National Statistics said this morning. This shows that the second quarter of 2020 is now 22.1% below the fourth quarter of 2019, which is more than three times greater than the total fall during the next largest recession period, which occurred during the global economic downturn of 2008 to 2009.
“It is clear, that the U.K. is in the largest recession on record,” said an ONS statement. “Our latest estimates show that the U.K.
The economy is now 17.2% smaller than it was in February 2020, the effects of which have been most pronounced in those industries that have been most exposed to public health restrictions and the effects of social distancing.”
While the precise effects of the recession on the media and entertainment industry are yet to be analyzed, it could have a significant knock-on impact on the sector. Recent months have shown how vulnerable cinemas, theatres and productions are to public health restrictions and the effects of social distancing.
However, it’s not all doom and gloom for the economy. Though it remained 17.2% below February levels, monthly GDP rose by 8.7% during June 2020.
“The economy began to bounce back in June, with shops reopening, factories beginning to ramp up production and house-building continuing to recover,” said Jonathan Athow, deputy national statistician for economic statistics at ONS, which also reports that businesses are increasing output as demand has increased following the easing of social distancing and lockdown measures.
“There was also an increase in information and communication; professional services; administrative and support services; and arts, entertainment and recreation sectors after these experienced falls in May 2020,” said ONS.
Chancellor Rishi Sunak warned of a ‘severe recession, the likes of which we have not seen’ in May. After the GDP figures were revealed, he promised no one in the UK would be ‘left without hope or opportunity’. He said: ‘I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here.
‘Hundreds of thousands of people have already lost their jobs, and sadly in the coming months, many more will. ‘But while there are difficult choices to be made ahead, we will get through this, and I can assure people that nobody will be left without hope or opportunity.’