finance

UK economy shrinks by 2% as Covid-19 slump begins – business live


Although restrictions on businesses and individuals were only introduced in mid-March, the ONS said it was enough to cause a 5.8% plunge in activity in March.

All three main components of growth, services, production and construction, were affected by the fallout from the global pandemic – with factories, shops, restaurants, hotels and building sites all closed on government orders.

Ruth Gregory, UK economist at consultancy Capital Economics, said: “March’s GDP figures showed the UK economy was already in freefall within two weeks of the lockdown going into effect. And with the restrictions in place until mid-May and then only lifted very slightly, April will be far worse.”

Service sector output – which accounts four-fifths of GDP – declined by more than 6% in March, while production fell by 4.2% and construction by 5.9%.

Over the year to the first quarter of this year, the economy grew smaller by 1.6% – its fastest rate of decline since late 2009.



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