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UK GDP Falls by 2% in First Quarter

The Office of National Statistics (ONS) has confirmed that the UK’s GDP fell by 2% in the first quarter of this year.

Its a decline that was inevitable, as the effects of coronavirus are laid bare.

The figures also capture measures that have been implemented by the government, to combat the economic effects of the virus.

The 2% drop in output is the steepest recorded since the fourth quarter of 2008, as the financial crash deepened.

When compared to the same quarter a year ago, the reduction in GDP was 1.6%.

This is the biggest comparative fall in production since the fourth quarter of 2009.

At that time the decrease in economic activity was also 1.6%.

Service Sector Crashes

The influential service sector has bore the brunt of the economic regression.

It fell by 1.9% between January and April.

Contractions in production were also found to have reached 0.27%

While the construction industry experienced a reduction of 0.16%.

Household Consumption Falls

Household consumption fell by 1.7% in Quarter 1 2020.

This was the largest contraction since the final quarter of  2008.

Government consumption and trade volumes have also deteriorated so far this year.

Research Think Tank Predicts Further GDP Fall

The National Institute of Economic and Social Research has predicted a major contraction in the economy.

It revealed that for the second quarter of this year, growth could decline by a massive 25% to 30%.

Dr Kemar Whyte, a senior economist with the institute, said that growth would fall by 25% in the lockdown months.

“Restarting the economy by promoting activities in upstream sectors such as construction, some manufacturing and the government will increase overall activities via helpful spillovers.”  He reflected.

“But without a vaccine, there is significant risk of a second wave which could trigger a further setback in the economy.”

 

 

 

 

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