GDP fell by 5.8% in March as the coronavirus dealt a hammer blow to the economy – and analysts expect WORSE to come
- The first quarter fall was worst since the end of 2008 at height of financial crisis
- UK economy contracted by 2 per cen in the first quarter of 2020, the ONS said
- It comes just a day after Chancellor Rishi Sunak said that the UK is in recession
- Here’s how to help people impacted by Covid-19
The UK economy contracted by 2% in the first quarter of 2020 after plunging 5.8% in March as the coronavirus crisis took hold, the Office for National Statistics has said.
The first quarter fall was the worst since the end of 2008 at the height of the financial crisis, while the March monthly plunge marked a record tumble.
Jonathan Athow, deputy national statistician for economic statistics at the Office for National Statistics (ONS), said: ‘With the arrival of the pandemic, nearly every aspect of the economy was hit in March, dragging growth to a record monthly fall.
‘Services and construction saw record declines on the month with education, car sales and restaurants all falling substantially.
The shocking figures come just a day after Chancellor Rishi Sunak extended the job subsidy scheme until the end of October as he conceded yesterday that the UK is already in recession
‘Although very few industries saw growth, there were some that did, including IT support and the manufacture of pharmaceuticals, soaps and cleaning products.
‘The pandemic also hit trade globally, with UK imports and exports falling over the last couple of months, including a notable drop in imports from China.’
The shocking figures come just a day after Chancellor Rishi Sunak extended the job subsidy scheme until the end of October as he conceded yesterday that the UK is already in recession.
Mr Sunak told the BBC: ‘We already know that many people have lost their jobs and it breaks my heart.
‘We’ve seen what’s happening with Universal Credit claims already. This is not something that we’re going to wait to see, it’s already happening.
‘There are already businesses that are shutting. There already people who have lost their jobs. That’s why I’m working night and day to limit the amount of job losses.’
Mr Sunak yesterday said the scheme, which sees the taxpayer subsidise 80 per cent of wages up to a maximum of £2,500 a month, is already supporting an astonishing 7.5million jobs.
He told MPs that the scheme would continue ‘completely unchanged’ until the end of July – despite warnings it could cost taxpayers more than £80billion.
After that, people who have been furloughed will continue to receive 80 per cent of their wages, but their employer will be asked to make a contribution towards the cost.
The scheme will also be tweaked to allow furloughed staff to start returning to work part-time from as little as one day a week – an idea that has been a key demand of business.
More to follow…