Covid-19: UK falls into recession

The widespread economic impact of Covid-19 has forced the UK officially into a recession for the first time in 11 years following a record decline in economic growth.

The economic consequences of lockdown to combat the spread of coronavirus saw household spend plunge as retail and hospitality businesses were forced to close for 12 weeks, while construction and production efforts were also put on hold. ONS statistics reported that the services sector fell by 19.9%, production by 16.9% and construction by 35.0%. 

A recession is occurs after two consecutive quarters of economic decline. The second quarter of 2020 (April to June) recorded a record fall of 20.4%, following a fall of 2.2% in Q1 (January to March).

“The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record,” said Jonathan Athow, deputy national statistical for economic statistics at ONS, which reported monthly GDP grew by 8.7% in June 2020, following growth of 2.4% in May 2020, as lockdown measures began to ease.

“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover. Despite this, GDP in June still remains a sixth below its level in February, before the virus struck.”

The retail industry has already begun to feel the bite of an economic downturn with many businesses already announcing significant job losses. Yesterday Debenhams said 2,500 jobs were to go, while thousands of jobs have been put at risk at retailers including John Lewis, WH Smith, Boots and M&S, as well as many hospitality businesses including Pizza Express, as the industry fears the high street will fail to recover from the blow.

Photo credit: Kathleen Gail / onurdongel

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