By PAN PYLAS, Related Press
LONDON (AP) — The British economic system appears set to fall again into recession after official figures on Friday confirmed that it shrank by 2.6% month-on-month in November, when a lot of the nation was in a second coronavirus lockdown.
The Workplace for Nationwide Statistics stated that on account of the autumn, the economic system is 8.5% smaller than its pre-pandemic peak. When the pandemic struck final spring, the economic system contracted by as much as a fifth over the primary half of the yr, earlier than a summer season easing of restrictions noticed the economic system get better a bit of these losses.
Due to the November fall, the economic system is ready to contract once more within the fourth quarter.
With many of the U.Okay. in an excellent tighter lockdown in the beginning of 2021 following a spike in new instances that has been blamed on a brand new variant of the virus in London and southeast England, it appears inevitable that the economic system will shrink additional within the first quarter of the yr. Which means it’ll have contracted for 2 consecutive quarters, the technical definition of a recession.
“It’s clear issues will get tougher earlier than they get higher and at present’s figures spotlight the dimensions of the problem we face,” stated Britain’s Treasury chief Rishi Sunak.
The November decline was not as unhealthy as some economists feared, a sign that corporations have managed to work out methods of promoting their items even when their doorways are closed via on-line companies.
The companies sector was hit laborious in November, shrinking by 3.4% as rafts of hospitality and leisure corporations had been pressured to close. The sector is now 9.9% smaller than it was in February 2020, earlier than the affect of the pandemic was first totally felt.
“The economic system took a success from restrictions put in place to include the pandemic throughout November, with pubs and hairdressers seeing the largest affect,” stated Darren Morgan, director for financial statistics. “Nevertheless, many companies adjusted to the brand new working situations through the pandemic.”
The hope is that the rollout of coronavirus vaccines — the U.Okay. is forward of many different international locations — will see a pick-up in exercise later this yr.
“Whereas the financial story at present is of solely the second-ever double-dip recession on document, the story of the yr can be a vaccine-driven bounce again in financial exercise for sectors like hospitality and leisure,” stated James Smith, analysis director of the Decision Basis.
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