London | The British economy contracted at a record rate of 9.9% in 2020 due to the shock of the coronavirus pandemic, which paralyzed entire sectors of activity for months, the National Statistics Office said on Friday ( ONS).
In the fourth quarter, the UK’s gross domestic product (GDP) rose 1.0%, following a rebound of 16.1% (revised from a previous estimate of 16.0%) in the third quarter.
From October to December, “there was an increase in activity in services, production and construction, even if it remained below its levels before the pandemic”, details the ONS.
In November, a lockdown in England and restrictions on activity in other British provinces pushed GDP down by 2.3% after a meager rebound in October.
The closures of hotels, restaurants and catering or food services, wholesale and retail trade, as well as businesses in the arts, entertainment and leisure sector were the biggest contributors to the recorded contraction.
Christmas shopping and the easing of part of the restrictions on activity at the start of December helped boost the consumption of goods and services, despite a return to restrictions during the last fortnight of the month.
This brought a halt to the recovery in many services such as restaurants, trade and personal services during the holiday season, which is usually crucial for many businesses.
“Despite two consecutive quarters of growth, the level of British GDP remains down 7.8% compared to a year earlier in the fourth quarter,” notes the ONS.
“Today’s (Friday) figures show that the economy has suffered a serious shock due to the pandemic, which has been felt by countries across the world,” commented Chancellor of the Exchequer Rishi Sunak in a press release.
“If there are positive signs of the resilience of the economy during the winter, we see that the current confinement”, which continued in January and February with in addition the closure of schools, “continues to have a big impact on a lot of people and businesses, ”he adds.
Recalling that the government is striving to “do everything to protect jobs and businesses”, the Minister emphasizes that when the next government budget is presented in early March, he will unveil measures to support employment and the economy “during the next phase of the pandemic ”.