A man wearing a mask as a precaution against the spread of Covid-19 rides in London.
May James | Images SOUP | LightRocket via Getty Images
The UK economy has contracted by 9.9% in 2020, the largest annual contraction since recordings began, because the coronavirus pandemic has devastated economic activity.
In the last quarter of the year, gross domestic product (GDP) rose 1%, according to the Office for National Statistics, as the country re-imposed blocking measures at the national level in an attempt to combat the recurrence of Covid-19 cases.
The annual contraction of 9.9% is more than double that recorded in 2009 following the global financial crisis.
Economists surveyed by Refinitiv expected an annual decline of 8% in 2020, with an expansion in the fourth quarter of 0.5%. This followed a revised return of 16.1% in the third quarter as social, travel and business restrictions were relaxed.
As of Friday morning, the UK had more than 4 million cases and 115,000 deaths, according to data compiled by Johns Hopkins University. The UK has been affected by new and more transmissible variants of the virus in recent months.
Hitesh Patel, portfolio manager at Quilter Investors, said Britain had experienced an “annus horribilis” in the form of a “trifect” of a public health crisis, economic disruptions and uncertainty surrounding Brexit.
“However, 2020 is in the past and the UK is likely to have a promising second half of the year, given the successful launch of the vaccine,” he said.
“This could be easily derailed if one of the mutations prevented the correct effect of the vaccines, but for the time being a double-dip recession has been avoided and blockades could soon be a thing of the past.”
England remains in a nationwide deadlock with no clear end date, although British Prime Minister Boris Johnson confirmed on Wednesday that about one in four adults, about 13 million people, have now received the first dose of the Covid vaccine.
Monthly GDP in December increased by 1.2% compared to the previous month, but remained 6.3% below the level of February 2020. GDP in the fourth quarter remained at 6.6% below the level observed in the fourth quarter of 2019.
The services sector grew by 1.7% in December, after contracting by 3.1% in November, while the manufacturing industry recorded its eighth consecutive month of growth, the ONS said, although the slightest inclination from May 2020.