LONDON: Britain’s economy shrank by a record 20.4 per cent in April from March as the country spent the month in a tight coronavirus lockdown, official data showed on Friday (Jun 12), in what is likely to be the low point of the slump before a long and slow recovery.
In the three months to April, gross domestic product contracted by 10.4 per cent from the previous three-month-period, the Office for National Statistics also said.
A Reuters poll of economists had produced median forecasts for a monthly fall of 18.4 per cent and a contraction 10 per cent in the February-April period.
“In line with many other economies around the world, coronavirus is having a severe impact on our economy,” Chancellor of the Exchequer Rishi Sunak said.
Government measures including a scheme to pay workers who are only temporarily laid off, alongside grants, loans and tax cuts for companies meant Britain, had “the best chance of recovering quickly as the economy reopens,” he said.
Next week much of Britain’s retail sector is due to reopen as long as shops follow social distancing rules.
Compared with April last year, the economy shrank by 24.5 per cent, the ONS said.
Output in the dominant services sector fell by 19 per cent in April from March while manufacturing was down more than 24 per cent and construction crashed by nearly half.
The Bank of England and the country’s budget office have warned that Britain could be heading for its deepest recession in three centuries this year.
BoE Governor Andrew Bailey said on Wednesday he could see some signs of an economic recovery as the coronavirus lockdown restrictions were lifted, but he warned there was still likely to be long-term economic damage.
On the same day, the Organisation for Economic Co-operation and Development said Britain was on course for the worst downturn among the countries it covers with the economy forecast to contract 11.5 per cent this year.