The UK economy shrank at the fastest rate since records began in April as the country felt the full impact of lockdown, with gross domestic product falling 20.4 per cent.
Figures from the Office for National Statistics showed the drop in output was the fastest monthly contraction on record as construction, business activity and consumer demand all plummeted to unseen levels due to the measures put in place to curb the coronavirus.
The monthly drop is three times greater than the fall experienced during the 2008 to 2009 economic downturn, when the economy shrank 6.9 per cent from the peak in February 2008 to the low of March 2009.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “In April the economy was around 25 per cent smaller than in February. Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.”
Services dropped 19 per cent due to the number of business closures, with some 16 per cent of firms in the services industry reporting zero turnover in April 2020.
Meanwhile, production dropped 20 per cent, manufacturing dropped 24 per cent and construction plummeted 40 per cent over the month — all record contraction rates.
Due to the suspension of construction projects, more than four in 10 (42 per cent) construction businesses reported zero turnover for the month. In 2019, the figure sat at just 7 per cent.
The economy was already shrinking before April. March saw GDP fall nearly 6 per cent as the lockdown measures were first put in place, while overall the economy shrank 2 per cent in Q1.
Ed Monk, associate director at Fidelity International, said April’s figure was “slightly worse than we feared”.
He added: “The Q2 estimates expected later this month will show output in a crater. However, with social distancing measures starting to relax…the economy is gradually reopening, and the growth number will hopefully spring back in the months ahead.”
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