A man wearing a mask as a preventive measure against the spread of Covid-19 walks through London.
May James | SOPA images | LightRocket via Getty Images
The UK economy contracted by 9.9% in 2020, its biggest annual contraction since records began, while the coronavirus pandemic devastated economic activity.
In the last quarter of the year, gross domestic product (GDP) grew 1%, according to the Office of National Statistics, with the country reimposing blockade measures across the country in an attempt to combat the resurgence of Covid-19 cases.
The 9.9% annual contraction is more than double that observed in 2009, after the global financial crisis.
Economists polled by Refinitiv had expected an annual drop of 8% in 2020, with an expansion in the fourth quarter of 0.5%. This follows a revised 16.1% recovery in the third quarter, as social, travel and business restrictions were eased.
As of Friday morning, the UK recorded 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 communicable variants of the virus in recent months.
Hitesh Patel, portfolio manager at Quilter Investors, said the UK experienced an “annus horribilis” in the form of the “trifecta” of a public health crisis, economic downtime and uncertainties surrounding Brexit.
“However, 2020 is in the past and the UK probably has a promising second half ahead of it, given the successful launch of the vaccine,” he said.
“This could easily be derailed if one of the mutations prevents vaccines from taking effect, but for now a double recession has been avoided and blocking could soon be a thing of the past.”
England remains in national confinement with no set end date, although British Prime Minister Boris Johnson confirmed on Wednesday that about one in four adults, approximately 13 million people, have already received the first dose of the Covid vaccine. .
The monthly GDP in December grew 1.2% in relation to the previous month, but was 6.3% below the level of February 2020. The GDP of the fourth quarter was 6.6% below the level observed in the fourth quarter of 2019.
The services sector grew 1.7% in December, having contracted 3.1% in November, while manufacturing recorded its eighth consecutive month of growth, said ONS, although with its lowest inclination since May 2020.