UK Economy Records Historic 19.8% Decline in Q2

Compared with a year earlier, Britain's second-quarter output tumbled 21.5 percent — the same as in Spain — while France reported a 19.0 percent drop.

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The statistics office said differences in how countries estimated public sector activity — especially whether they focused on money spent or used the ONS' approach of looking at the extent of disruption to normal services — complicated international comparisons.

Nonetheless, it said the UK economy shrank more than any other Group of Seven economy in the first half of 2020.

There have been some bright spots in the recovery.

Retail spending exceeded pre-pandemic levels in July and August — driven by a boom in online shopping, groceries and home improvement — and figures on Wednesday showed the biggest annual rise in house prices in more than four years.

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However, Bank of England Governor Andrew Bailey has warned the expansion is likely to lose pace, with unemployment set to rise to 7.5 percent later this year, some parts of the economy facing new Covid-19 restrictions and headwinds from a fresh jump in cases.

Britain's current account deficit — normally one of its weak spots — shrank sharply to £2.8 billion ($3.6 billion), or 0.6 percent of GDP, reaching its smallest in nine years as a result of the slump in global trade caused by the pandemic. ($1 = 0.7794 pounds)

(Writers: David Milliken, William Schomberg | Editors: Michael Holden, Estelle Shirbon, Andrew Heavens, Tomasz Janowski)

Source: https://news.trust.org/item/20200930055420-iazda/