The UK may not be in a double-dip recession, but it will feel like it | Business

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If 1709 was the year of the Great Frost then economic historians will remember 2020 as the year of the Great Pandemic. Everything that has happened to output has been related to Covid-19.

Overall, the economy as measured by gross domestic product fell by 9.9% from its 2019 level, making it the biggest fall since modern records began. At least for now, because 1921 runs 2020 reasonably close as an economic horror show, and at this stage the Office for National Statistics is only giving its first growth estimates.

Upward revisions are possible when more data comes in, but according to the Bank of England nothing like 2020 has been seen since Queen Anne was on the throne in the early 18th century.

In the here and now, the UK received a modest โ€“ if temporary boost โ€“ as the four-week lockdown imposed in England in November was relaxed. The service sector businesses that had been most severely affected by restrictions, such as pubs and restaurants, saw activity rise early in the month before being forced to shut again as December drew to a close.

GDP history chart

Growth in both December and the fourth quarter of 2020 was marginally stronger than economists had expected, and there were a number of reasons for that. Restrictions were not as draconian as they had been in the spring, businesses learned how to adapt, there was a boost to the output of the health sector from the ramping up of the Covid test and trace programme, and there was some stockpiling by manufacturers bfore the end-of-year Brexit deadline.

The fact that the economy expanded by 1.0% in the period between October and December means that the UK has avoided a double-dip recession โ€“ two separate periods in which GDP contracts for at least two quarters.

Hafta Ichi
Source: The Guardian
Keyword: The UK may not be in a double-dip recession, but it will feel like it | Business

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