UK plunges into recession
Britain’s recession is deeper than those recorded by comparable economies in Europe, notably Germany, France and Italy, or that of the US. The other Group of Seven economies, Japan and Canada, have yet to post second-quarter numbers but no economist thinks they will be as bad as the UK’s.
Kallum Pickering, senior economist at Berenberg Bank, said the main reason why the UK. economy has fared so badly is that the lockdown was introduced at “a later stage” in the outbreak, particularly when compared with others in Europe.
By the time Prime Minister Boris Johnson introduced the lockdown on March 23, the UK had “a bigger first wave” than could have otherwise been the case, meaning restrictions had to persist for relatively longer. Shops in Germany, for example, reopened on May 6 compared with June 15 in England.
The UK has the highest official coronavirus-related death toll in Europe with 46,611 deaths. The actual death toll is believed to be higher as the official dataset only incorporates those who have tested positive for Covid-19.
Unlike others, Britain’s statistics agency provides monthly growth figures and these offer hope that the economy is healing as lockdown restrictions are eased. In June, the British economy grew by a monthly 8.7 per cent.
“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and house-building continuing to recover,” said statistician Jonathan Athow.
The British government hopes additional measures such as the reopening of pubs and restaurants and a return to offices will further fuel the recovery.
However, Samuel Tombs, senior UK economist at Pantheon Macroeconomics, thinks the UK economy will “lag” others because of “structural disadvantages”, notably the fact that the economy is so dependent on the services sector.