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13 May, 2020 07:56

British economy posts worst quarter since 2008 financial crisis & that’s before full impact of coronavirus is known

British economy posts worst quarter since 2008 financial crisis & that’s before full impact of coronavirus is known

UK gross domestic product (GDP) fell two percent in the first three month of the year, according to data from the Office for National Statistics, signaling the first direct impact of Covid-19 on the economy.

After facing the deepest monthly fall in March, which stood at 5.8 percent, the British economy had the worst quarter-on-quarter results since the financial crisis in 2008.

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“With the arrival of the pandemic nearly every aspect of the economy was hit in March, dragging growth to a record monthly fall,” Jonathan Athow, the deputy national statistician for economic statistics, said, commenting on Wednesday’s GDP figures.

All key sectors contributed to the record contraction. Production fell by 2.1 percent, construction by 2.6 percent, and services dropped 1.9 percent in the three months to March 2020. Despite the widespread drops, some industries managed to show growth, the largest of which was computer programming, consultancy and related activities, which gained 1.4 percent.

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In a gloomy forecast released last week, the country’s central bank said it expects the second quarter to be even more devastating, as GDP could fall as much as 25 percent. For the year, the British economy could shrink by 14 percent, making it the worst economic slump since 1706.

On the bright side, the Bank of England expects economic growth to rapidly pick up and go back to pre-coronavirus crisis levels in the second half of 2021.

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