You are here: Home » International » News » Economy
Business Standard

Britain economy suffers biggest slump in 300 years amid Covid-19 lockdowns

Gross domestic product rose 1 per cent from the third quarter, fuelled by a boom in construction and government spending

Topics
UK economy | Coronavirus | UK GDP data

David Goodman | Bloomberg 

Rishi Sunak. Photo: Reuters
Britain's Finance minister Rishi Sunak said the record fall in GDP was in line with other countries when measured on a comparable basis | Photo: Reuters

The grew at double the pace expected in the fourth quarter, capping a year that delivered the worst slump since 1709.

Gross domestic product rose 1 per cent from the third quarter, fuelled by a boom in construction and government spending. That averted the risk of a second recession early this year but left a 9.9 per cent contraction for the whole of 2020, the biggest slump since a Great Frost killed crops across Europe.

The figures add weight to the Bank of England’s view that growth is set to surge as Prime Minister Boris Johnson’s campaign to vaccinate the population takes hold. The central bank’s Chief Economist Andy Haldane expects consumers to unleash an estimated $345 billion of savings that households built up while the was locked down.

“A year from now, annual growth could be in the double digits,” Haldane wrote Friday in the Daily Mail newspaper.

chart


GDP in the fourth quarter was 7.8 per cent lower than a year earlier, further below pre-pandemic levels than any other Group of Seven

Output grew 1.2 per cent in December alone, recouping some of the loss from the previous month when England was placed in a four-week lockdown.

All the main segments of the economy in the fourth quarter, with construction posting the strongest reading. The outlook for the recovery hinges on the degree of scarring left by the pandemic. Britain's Finance minister said the record fall in GDP was in line with other countries when measured on a comparable basis. “I think it's important to clear up this question of our comparative economic performance actually,” he told UK broadcasters.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, February 13 2021. 01:19 IST
RECOMMENDED FOR YOU
.