Latest statistics from the U.K.’s Office of National Statistics show the true cost of a full month of lockdown measures which led to the closure of all non-essential businesses.
“April’s fall in GDP is the biggest the U.K. has ever seen, more than three times larger than last month and almost ten times larger than the steepest pre-Covid-19 fall. In April the economy was around 25% smaller than in February,” said Jonathan Athow, Deputy National Statistician for Economic Statistics.
The statistics were worse than expected than economists surveyed by Reuters who predicted a 18.4% drop.
The OECD had warned that the U.K. was the developed economy likely to suffer the worst economic impact from the pandemic with the Paris-based think tank forecasting a 11.5% drop in GDP over 2020.
Italy, which was the first country in Europe to be impacted by the pandemic, was expected to see a 11.3% drop in national income, while the United States would see a 7.3% fall over the year.
The slump in national income during the pandemic outpaced even France, Spain and Italy, which had imposed far stricter lockdown measures. U.K. for the first quarter of 2020 plunged 10.4%, ahead of France’s 5.8% drop and Italy’s 4.7% retraction.
European stocks fell on the news of the bleak economic data from U.K., and the worst day on Wall Street since March with the S&P 500 closing 5.9% lower on Thursday. London’s FTSE 100 was down 1.15%, the Europe-wide STOXX Europe 600 index fell 4.10% while Japan’s Topix index closed down 1.15%.
Today’s economic data will make bleak reading for Prime Minister Boris Johnson who is facing mounting criticism for his handling of the pandemic even from inside his own government. The U.K. has now logged 41,128 deaths from the coronavirus, the highest toll in Europe and second in the world behind the U.S., while facing an immense economic hangover from placing its economy on life support. Economic data for June is likely to show growth springing back as stores are allowed to reopen on June 15, but a key question will be how many job losses will be made permanent, and how more money will the British government and the Bank of England need to pump into lifelines to businesses and workers.
I joined Forbes as the European News Editor and will be working with the London newsroom to define our coverage of emerging businesses and leaders across the UK and Europe. Prior to joining Forbes, I worked for the news agency Storyful as its Asia Editor working from its Hong Kong bureau, and as a Senior Editor in London, where I reported on breaking news stories from around the world, with a special focus on how misinformation and disinformation spreads on social media platforms. I started my career in London as a financial journalist with Citywire and my work has appeared in the BBC, Sunday Times, and many more UK publications. Email me story ideas, or tips, to email@example.com, or Twitter @_iainmartin.