Coronavirus: UK economic system hit worse than first thought
The UK economic system shrank greater than first thought between January and March, contracting 2.2% within the joint largest fall since 1979, official figures present.
The Workplace for Nationwide Statistics (ONS) revised down its earlier estimate of a 2% contraction, with all the principle financial sectors dropping.
There was a big financial affect in March, because the coronavirus pandemic started to have an impact.
The info comes because the prime minister is set for a major speech on the economy.
Jonathan Athow, deputy nationwide statistician on the ONS, stated: “Our extra detailed image of the economic system within the first quarter confirmed GDP shrank a bit greater than first estimated.
“Info from authorities confirmed well being actions declined greater than we beforehand confirmed.
“All fundamental sectors of the economic system shrank considerably in March as the results of the pandemic hit.”
The primary-quarter contraction is now the joint largest drop for the reason that July-to-September interval in 1979.
Mr Athow stated: “The sharp fall in shopper spending on the finish of March led to a notable improve in households’ financial savings.”
When put next with the identical three-month interval a yr in the past, the economic system shrank by 1.7%, worse than the earlier estimate of a 1.6% contraction.
However with the coronavirus lockdown solely coming into pressure on 23 March, the second quarter will present the total hit on the economic system.
Latest ONS month-to-month figures showed the economy plummeted by 20.4% in April – the most important drop in a single month since data started.
That contraction was 3 times better than the decline seen throughout the entire of the 2008 to 2009 financial downturn.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, stated the most recent figures might be summed up in a single line: “The largest contraction for 40 years, regardless that Q1 contained simply 9 lockdown days.”
The info “was simply the prelude” to the more severe to come back, he added.
Afterward Tuesday, Boris Johnson is about to make a keynote speech on the economic system with a promise to “construct again higher”.
Talking within the West Midlands, the prime minister will say he needs to make use of the coronavirus disaster “to sort out this nation’s nice unresolved challenges”.
As a part of what he’s anticipated to name a “new deal”, Mr Johnson will set out plans to speed up £5bn of spending on infrastructure initiatives.