The UK economy has been hit hard by the corona virus measures. Between April and June the economy shrank by more than a fifth. A record according to the British statistical office.
The impact in the UK is even bigger than in the rest of Europe. In the EU countries, the economy contracted by an average of almost 12 percent in the second quarter. Even in badly affected Spain (-18.5 percent) the boom was less strong than in the United Kingdom. In the USA, the contraction was also less pronounced (-9.5 percent).
The British government introduced lockdown measures relatively late, bringing the blow almost entirely to the second quarter. At the end of March, all non-essential businesses closed and the British were asked to stay home. Most of the restrictions were still in place in June, locking part of the economy off for the entire quarter.
“The restoration will take more than a year.”
The economy picked up somewhat in June due to the easing. However, the level before the corona crisis is far from in sight.
The country now has the highest number of coronavirus deaths in Europe. In addition, local sources of contamination have been emerging for some time, leading to new local measures. As a result, concerns remain about new national lockdowns. At the same time, one factor is that the UK government is already phasing out wage support and that Brexit is still causing uncertainty for many companies.
The Bank of England recently announced that the UK economy is expected to recover only slowly over the coming months. The central bank forecasts that it will not be possible to reach the level of the end of 2019 until the end of next year at the earliest. Unemployment is expected to stay above pre-pandemic levels through 2023.