UK economy shrank by colossal 20.4% in April due to Covid-19 shutdown

The monthly decline, unprecedented in both scale and speed, had been expected given that much of the economy was shuttered as part of the lockdown, which was put in place on March 23.

The British economy shrank by a colossal 20.4% in April, the first full month that the country was in its coronavirus lockdown, official figures showed Friday.

Lockdown restrictions are slowly being eased. On Monday, for example, non-essential shops, such as department stores and electronic retailers, can reopen if they can abide by social distancing requirements. (Bloomberg file photo)

The monthly decline, unprecedented in both scale and speed, had been expected given that much of the economy was shuttered as part of the lockdown, which was put in place on March 23. Following on from March’s 5.8% decline, the UK economy has contracted by around a quarter in just two months.

With much of the economy still mothballed in May and June, the UK is heading for one of its deepest recessions ever — the Organization for Economic Cooperation and Development warned Thursday that the UK is set to be the hardest-hit industrial economy this year.

Unemployment has gone up during the pandemic but government support measures have helped keep a lid on the increase.

Frances O’Grady, general secretary of the umbrella Trades Union Congress, said targeted support for hard-hit sectors of the economy is needed, as well as a jobs guarantee to help those who lose work.

“The more people in work, the faster we will work our way out of recession,” she said.

A more detailed look at the April figures from the Office for National Statistics show that all areas of the economy were hit during the month, in particular pubs, education, health and car sales.

Lockdown restrictions are slowly being eased. On Monday, for example, non-essential shops, such as department stores and electronic retailers, can reopen if they can abide by social distancing requirements.

The government is coming under mounting pressure to relax the social distancing guidelines, as well, in order to help the economy recover. In the UK people have to remain 2 meters (6-1/2 feet) apart, which is more than most countries. The government says the required distance is under constant review.

Many lawmakers within Prime Minister Boris Johnson’s Conservative Party as well as many in the business community, are urging the government to reduce the rules to potentially make it easier for shops to reopen and to generate more sales when they do.