UK economy shrinks by 9.9% amid pandemic

The British economy shrank by a record 9.9 per cent last year because of the impact of the COVID pandemic despite managing strong growth in the second half, according to data from the Office for National Statistics (ONS), which said in a statement today that the contraction marked the largest annual fall in UK gross domestic product (GDP) on record.

Finance minister Rishi Sunak said the economy had suffered a ‘serious shock’ from the health crisis.

The data came a week after the Bank of England forecast economic recovery on the back of the United Kingdom’s vaccines rollout that is under way.

GDP grew by 1 per cent in the fourth quarter ending December, after an upwardly-revised third-quarter expansion of 16.1 per cent, the statement added.

"Today's figures show that the economy has experienced a serious shock as a result of the pandemic, which has been felt by countries around the world," Chancellor of the exchequer Sunak said in reaction to the data.

"While there are some positive signs of the economy's resilience over the winter, we know that the current lockdown continues to have a significant impact on many people and businesses,” he said.

"That's why my focus remains fixed on doing everything we can to protect jobs, businesses and livelihoods," he said, adding he would set out further support measures in his upcoming budget on March 3.

ONS said the economy also grew by 1.2 per cent in December alone, on the back of looser virus restrictions in parts of the country in the run-up to Christmas.

Despite two successive quarters of growth in the second half of last year, the economy remains 7.8 per cent smaller than its pre-pandemic level.

 

 

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