A man wearing a mask as a precautionary measure against the spread of Covid-19 rides in London.
May James | SOUP Pictures | LightRocket using Getty Images
The UK economy contracted by 9.9% in 2020, its largest annual contraction since records began, as the coronavirus pandemic ravaged economic activity.
In the last quarter of the year, gross domestic product (GDP) grew by 1%, according to the National Statistics Office, as the country imposed new national closure measures to try to combat the resurgence of cases. Covid-19.
The annual contraction of 9.9% is more than double that recorded in 2009 after the global financial crisis.
Economists surveyed by Refinitiv expected an annual decline of 8% in 2020, with an expansion of 0.5% in the fourth quarter. This followed a revised 16.1% rise in the third quarter as social, travel and business restrictions eased.
As of Friday morning, the UK had recorded more than 4 million cases and 115,000 deaths, according to data collected by Johns Hopkins University. The UK has been shattered 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 a “trifecta” of a public health crisis, economic stagnation and uncertainty surrounding Brexit.
“However, 2020 is already over and the UK could have a promising second half of the year ahead of the successful launch of the vaccine,” he said.
“This could easily derail if one of the mutations prevents the vaccines from taking effect properly, but for now a double-dip recession has been averted and blockages may soon be a thing of the past.”
England remains in a national closure with no clear end date, although British Prime Minister Boris Johnson confirmed on Wednesday that about one in four adults, about 13 million people, have received the first dose of Covid vaccine.
Monthly GDP in December rose 1.2% from the previous month, but remained 6.3% below the level of February 2020. Fourth quarter GDP remained 6.6% below of the level observed in the fourth quarter of 2019.
The services sector grew by 1.7% in December, as it contracted by 3.1% in November, while the manufacturing industry recorded its eighth consecutive month of growth, the ONS said, although its smallest slope since May 2020.