The United Kingdom’s economy has been badly hit by the Covid-19 pandemic that it reported a 9.9% sharp drop in the Gross Domestic Product in 2020.
The British economy was in a sharp decline last year that it was the biggest contraction reported in over 300 years or since 1709 during the time of the Great Frost which drew one of the harshest winters in the recorded in the UK.
The Office of National Statistics reported that nominal GDP increased by 1.6% in fourth quarter of2020, and fell by 4.8% on an annual basis in 2020, driven by declines in from January to June 2020.
“The implied GDP deflator represents the broadest measure of inflation in the domestic economy, reflecting changes in the price of all goods and services that comprise GDP. This includes the price movements in private and government consumption, investment and the relative price of exports and imports,” the ONS reported.
The UK’s economy has been badly hit from the onset of the virus when many shops and restaurants closed while enforced lockdowns and stay at home orders have resulted to devastating impacts to the travel industry and the manufacturing sector.
The discovery and spread of the new variant discovered in north of England have also further affected the recovery of the British economy as the 9.9% GDP contraction was twice the figures of decline recorded during the 2009 global financial crisis.
In December, the ONS reported that the economy grew by 1.2%, after withdrawing by 2.3% in November, as some restrictions eased. However, with the third lockdown enforced in the UK due to the spread of the new variant, many economic analysts say it will take some time before the country’s economy will pivot away from the slowdown in economic growth.
“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,” UK’s treasury minister Chancellor Rishi Sunak, said in a statement.
“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.”
The Bank of England also forecasts the economy will shrink by 4% in the first three months of 2021 because of the new lockdown and Brexit disruption. The bank said it will take until early 2022 before the UK’s GDP regains its pre-COVID size, assuming vaccination continues at the current rapid pace, which outstrips the rest of Europe’s.
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