The UK Economy Shrank By A Record 9.9% in 2020

 The UK Economy Shrank By A Record 9.9% in 2020

The Office for National Statistics (ONS) said the UK economy shrunk by a record 9.9% last year as coronavirus restrictions hit economic output.

The report showed that the contraction in 2020 “was more than twice as much as the previous largest annual fall on record”.

However, towards the end of the year, the economy experienced some growth, a great intervention that avoided an imminent double-dip recession.

A double-dip is when the economy briefly recovers from recession, only to quickly sink back. A recession is generally defined as two consecutive quarters where the economy contracts.

In December, the economy grew by 1.2%, after shrinking by 2.3% in November, as some restrictions eased.

Hospitality, car sales and hairdressers were the first to recover some lost ground, according to the ONS.

The growth meant that in the October-to-December quarter the economy expanded by 1%. As a result, the UK is expected to avoid what could have been its first double-dip recession since the 1970s.

ONS deputy national statistician Jonathan Athow said: “An increase in Covid-19 testing and tracing also boosted output. The economy continued to grow in the fourth quarter as a whole, despite the additional [lockdown] restrictions in November.”

GDP was first measured in the aftermath of the Second World War, and the measure has never previously dropped by more than 4.1% in a year. However, the Bank of England models GDP going back centuries, and the 2020 contraction could be worse since 1709.

Patsy Nwogu

A writer focused on data journalism, health and data analytics.

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