UK economy suffers record drop in 2020

The UK’s annual GDP fell by 9.9 percent in 2020 amid the pandemic, the largest yearly slump on record.

The economy returned to growth in December, up 1.2 percent compared to a drop of 2.3 percent in November as restrictions eased, according to new data from The Office for National Statistics (ONS).

Despite strong growth through the second half of 2020 as the country exited lockdown, the economy at the end of December was still 6.3 percent percent smaller than pre-pandemic levels in February.

Dr Kemar Whyte, senior economist at National Institute of Economic and Social Research (NIESR), said in a statement: “According to today’s ONS figures, UK GDP contracted by 9.9 percent in 2020, which is likely to be the largest annual fall among G7 countries last year. Economic growth slowed significantly, dropping from 16.1 percent in the third quarter to 1 percent in the last quarter of the year.

“As a result, the level of GDP in the fourth quarter remained about 8 percent below pre-pandemic levels even before a third lockdown became necessary in January 2021.

“With Covid-19 restrictions expected to remain elevated until early spring, we anticipate a sharp decline in activity during the first quarter of the year. Nevertheless, growth will pick up from the second quarter onwards as restrictions ease on the back of a successful vaccination programme.”

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