UK economy plunged 20% in first month of lockdown – biggest fall on record

(Picture: Reuters)

The UK economy plunged by 20.4% in April – the first full month of lockdown – as shops and factories closed and workers were sent home.

April’s fall in gross domestic product (GDP) is the biggest drop the UK has seen since records began in 1997.

It is a massive drop from the then-record 5.8% fall in March GDP that the Office for National Statistics reported last month.

It means that GDP fell by 10.4% in the three months to April and sets the UK on course for one of its worst quarters in history.

May’s GDP figures are also likely to be awful, before things start to ease again in June as the economy slowly reopens, statisticians predict.

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Large parts of the economy were put on hold on March 23 when Boris Johnson told people they must stay inside and only leave the house when absolutely necessary in order to slow the spread of coronavirus.

Experts had been expecting April’s GDP to contract by 18.7%, according to a consensus compiled by Pantheon Macroeconomics.

Jonathan Athow, Deputy National Statistician for Economic Statistics, said: ‘April’s fall in GDP is the biggest the UK 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.

April’s drop in GDP is the biggest the UK has seen since records began in 1997 (Picture: ONS)

‘Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.

‘Manufacturing and construction also saw significant falls, with manufacture of cars and housebuilding particularly badly affected.

‘The UK’s trade with the rest of the world was also badly affected by the pandemic, with large falls in both the import and export of cars, fuels, works of art and clothing.’

Junior health minister Edward Argar said the GDP fall was ‘significant’ but ‘not unexpected’.

He told Sky News this morning: ‘It is a significant contraction in the economy, it was not something that was unexpected by the Chancellor or by others because we knew with lockdown in place – businesses and others not able to operate normally – that there would be a significant impact.’

It means the country will almost certainly be declared to be in recession. This is commonly defined as two consecutive quarters of decline to the GDP.

The first quarter – January, February, March – saw the economy shrink by 2%, with only one week of lockdown covered. Financial analysts say it is now almost certain that the second quarter – April, May and June – will also see a significant shrink in GDP.

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