The UK economy has shrunk by 2% in first three months of the year.
Figures released by the Office of National Statistics this morning reveal the biggest fall in size since the financial crisis in 2008.
The services sector fell by the most on record.
Accommodation and food services saw one of the biggest falls in UK economic output in the first three months with falls in most sectors.
Education, car sales and restaurants were also badly hit.
However in one or two sub sectors, inc IT support, manufacture of pharmaceuticals, soaps and cleaning products actually expanded
Construction output was particularly badly hit, it fell 5.9% in March 2020; new work by 6.2%and repair and maintenance 5.1% both fell significantly
James Smith, Research Director at the Resolution Foundation, said:
“The lockdown was only in place for seven working days in the first three months of the year. But it was still enough to bring about the biggest quarterly economic contraction since the peak of the financial crisis and the weakest single-month change on record.
“With the country in full or partial lockdown well into the second half of the year, the grim economic milestones hit in the latest data will be shattered next time around.
“Today’s figures serve as a reminder as to why a bold economic policy response has been needed. That approach will need to continue as Britain begins the long road out of this economic crisis.”
Rain Newton-Smith, CBI Chief Economist, said:
“The UK economy was hit hard by the necessary shutdown at the end of March, and recent data suggests the full impact of that difficult decision is still yet to come.
“The range of financial support for businesses and workers provided by the government has been a lifeline for many firms so far. These schemes are critical in keeping companies afloat and they will need to adapt as the economy restarts.
“Reopening our economy will be a gradual, complex process. The Government’s new guidance has helped, giving businesses some flexibility for their individual circumstances. Ultimately, keeping health at the heart of a recovery plan will be key to sustaining an economic revival.”
