A man wearing a mask as a preventive measure against the spread of Covid-19 is walking in London.
May James | SOPA images | LightRocket via Getty Images
The British economy shrank by 9.9% in 2020 the biggest annual contraction since the records began, while the coronavirus pandemic devastated economic activity.
In the last quarter of the year, gross domestic product (GDP) grew 1%, according to the Office for National Statistics, when the country reintroduced nationwide lockdown measures in an effort to stem a resurgence of Covid-19 cases. combat.
The annual contraction of 9.9% is more than double that in 2009 in the wake of the global financial crisis.
Economists surveyed by Refinitiv had expected an annual decline of 8%, with an expansion of 0.5% in Q4 in 2020. This follows a revised rebound of 16.1% in the third quarter as social, travel and business restrictions were relaxed.
Friday morning, the UK recorded more than 4 million cases and 115,000 deaths, according to data collected by Johns Hopkins University. The UK has been plagued by new and more transmissible variants of the virus in recent months.
Hitesh Patel, portfolio manager at Quilter Investors, said the UK had experienced an “annus horribilis” in the form of the “trifecta” of a public health crisis, economic shutdowns and uncertainty surrounding Brexit.
“2020 is in the past, however, and is undoubtedly a very promising second half of the year ahead given the success of the introduction of the vaccine,” he said.
“This could easily be derailed if one of the mutations prevented the vaccines from working properly, but for now a double dip recession has been avoided and lockdowns could soon be a thing of the past.”
England is still in a nationwide lockdown with no clear end date, although British Prime Minister Boris Johnson confirmed on Wednesday that about one in four adults, about 13 million people, has now received the first dose of a Covid vaccine.
Monthly GDP increased by 1.2% in December compared to the previous month, but remained 6.3% below the level of February 2020. GDP in the fourth quarter remained 6.6% below the level of the fourth quarter of 2019.
The services sector grew 1.7% in December, after contracting 3.1% in November, while the industry grew for the eighth consecutive month, the ONS said, albeit with the smallest increase since May 2020.