The consequences of the coronavirus lockdown have had a dramatic impact on the UK economy. Between the months of April and June, the economy experienced its biggest decline on record, meaning the country is now officially suffering from a recession.
2nd Quarter Woes
A comparison to January, February and March has shown a 20.4% shrink in the economy, due to shops being forced to close and a fall in construction output.
With people being unable to leave their houses for a significant period, household spending has dramatically slumped.
The Office for National Statistics (ONS) has suggested that this fall is largely due to the closing of restaurants, hotels, schools and shops, all of which were driving four-fifths of the economy before the virus struck.
A recession is defined as an economic decline that lasts for two consecutive quarters. The country is suffering from this for the first time since 2009.
There have been varying opinions on this. Chancellor Rishi Sunak described the pandemic as “a very difficult and uncertain time,” admitting that the government was forced to “grapple with something that was unprecedented.”
The shadow chancellor, Anneliese Dodds, has a more accusatory opinion, blaming Boris Johnson for the scale of the economy’s slump: “A downturn was inevitable after lockdown – but Johnson’s jobs crisis wasn’t.”
She continues to point out that the combination of the worst recession, and the worst excess death rate, in Europe is a tragedy for British people, and that Boris Johnson is somewhat to blame.
There are slight signs of improvement, with the economy looking to bounce back following the ease of lockdown restrictions in June, growing by 8.7% in June compared to a mere 1.8% the month before.
However, deputy national statistician for economic statistics, Jonathan Anthow, points out that: “Despite this, gross domestic product in June still remains a sixth below its level in February, before the virus struck.”
However, it is thought that the recession will result in further job losses in the next few months after the number of people in work fell by an astounding 220,000 people during the lockdown months.