The UK economy shrank considerably during the first Covid lockdown but bounced back more strongly than anticipated at the end of 2020, according to official statistics.
Historic low for UK economy
The Office for National Statistics (ONS) stated that gross domestic product (GDP) shrank by even more than initially predicted between April and June last year, crashing by 19.5%. However, the ONS declared that the economy recovered by 16.9% and 1.3% in the third and fourth quarters of 2020 respectively.
GDP tumbled by 9.8% in total in 2020 which is the worst annual performance for over 300 years.
Deputy national statistician at the ONS, Jonathan Athow, said: “Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year. However, these new estimates paint the same overall picture as before, with historically large falls in GDP in the spring, followed by a recovery in the summer and autumn.”
The 9.8% annual decrease denotes the sharpest since official records began, as historical figures from the Bank of England indicate that it is the largest decline since the Great Frost of 1709.
However the ONS emphasised that its GDP estimates are “subject to more uncertainty than usual” due to the difficulty of collecting data during the pandemic. The UK economy was one of the hardest hit within the Organisation for Economic Co-operation and Development (OECD), with only Spain and Argentina seeing steeper falls.
Recent monthly stats from the ONS also indicate that the third English lockdown knocked GDP a further 2.9% in January. The ONS also released the UK current account deficit stats (the difference between the value of the goods and services the UK imports and the goods and services it exports) on Wednesday stretched to £26.3 billion in the fourth quarter of 2020.
This amounts to 4.8% of Britain’s GDP and is nearly double the level three months prior due to companies stockpiling imports before the December 31 Brexit deadline.