Boris Johnson’s government has assumed that the United Kingdom is on its way to the worst recession in its recent history, after the Gross Domestic Product (GDP) recorded a 2% drop in the first quarter of the year, the largest drop since 2008, according to data released yesterday by the National Statistics Office. It is not a record figure and falls below the 3% recently suggested by the Bank of England. In any case, in March, the month that confinement began, the drop was 5.8%.
Britain’s finance minister, Rishi Sunak, anticipated that the country is “very likely” to face a “significant recession” this year because of the Covid-19. “A recession is defined in technical terms as two quarters of reduced GDP. We have seen one now with only a few days of impact (in March) from the virus, so it is very likely that the UK economy will face a significant recession this year,” he said.
Compared with the same quarter last year, GDP fell by 1.6% between January and March 2020, the largest drop since the fourth quarter of 2009, according to ONS data. According to the agency, there was a general alteration in economic activity in the first quarter, especially because the services sector, the economic lungs of the United Kingdom, fell by 1.9%, although those of industry and construction also suffered a contraction, of 2.1% and 2.6%, respectively.
Once the effects of the pandemic are accounted for during April, there will be a clearer perception of the immense damage the coronavirus has done to the UK economy.
The worst is yet to come.