It’s been no mystery that the UK economy took a severe beating in 2020: two lockdowns, a host of circuit-breakers and fire-breakers, Christmas cancelled for millions of people. The experience of an economy forced to hibernate for months on end last year is reflected in today’s GDP update from the Office for National Statistics, showing the economy contracted 9.9 per cent last year — the ‘largest yearly fall on record’ and biggest contraction in 300 years.
The fall isn’t quite as stark as the Office for Budget Responsibility forecast alongside the Chancellor’s spending review last November (an estimated 11.3 per cent), but it still represents one of the largest economic hits among the big economies.
How do last year’s figures bode for this year’s recovery? As it stands, the economy is still 6.3 per cent below pre-pandemic levels, and is likely to fall further in Q1 this year due to the strict lockdown currently in place.
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