- In March alone, gross domestic product fell by 5.8%, the biggest single month since comparable records began/
- "It is a sledgehammer," said Connor Campbell, a financial analyst.
- "However, that is almost purely down to when lockdown was implemented rather than any actual outperformance, meaning even more pain is going to be felt in Q2."
- Visit Business Insider's homepage for more stories .
ADVERTISEMENT
The UK economy shrank 5.8% in March, the fastest drop in history — and it's only going to get worse
The UK's economy shrank at the fastest rate since the 2008 financial crisis in the first three months of 2020, the Office for National Statistics said Wednesday.
FILE PHOTO: A person is seen riding a bicycle wearing a protective face mask beside an art installation called Out of Order while the spread of the coronavirus disease (COVID-19) continues, London, Britain, April 20, 2020. REUTERS/Peter Nicholls
ADVERTISEMENT
Recommended articles
UK's economy shrank at the fastest pace since the global financial crisis in the first quarter of 2020, according to data released Wednesday by the country's statistics authority.
The Office for National Statistics (ONS) said UK's gross domestic product fell by about 2% in the first quarter, followed by flat GDP in the fourth quarter of 2019.
The sizeable decline reflects the sharp 5.8% fall in March, when the UK went into lockdown which led to dips in output across the services, production, and construction industries. That was the fastest monthly drop since the ONS started recording monthly data over 20 years ago.
ADVERTISEMENT
"This is the largest quarterly contraction in the UK economy since the 2008 global financial crisis and reflects the imposing of public health restrictions and voluntary social distancing put in place in response to the COVID-19 pandemic," the ONS said in a statement.
Screenshot 2020 05 13 at 08.16.07
ONS
While the ONS advised against putting too much weight on just one month's data, it said the figures were helpful in understanding the broader picture.
Elsewhere in Europe, the eurozone economy contracted by 3.8% in the first quarter according to data released at the end of April. France and Spain shrank by 5.8% and 5.2% respectively in the same period.
ADVERTISEMENT
Analysts, however, were astonished by UK's data as they expected a larger decline of between 2.5% to 3% in the first three months of the year, and a 7.9% collapse for March in particular. They expect an even bigger slump in the second quarter.
"That actually means the UK avoided the kind of Q1 contraction seen by its peers France fell 5.8%, Italy 4.7% and Spain 5.2%," said Connor Campbell, a financial analyst at SpreadEx, while he noted the UK's contraction was a "sledgehammer."
"That is almost purely down to when lockdown was implemented rather than any actual outperformance, meaning even more pain is going to be felt in Q2," Campbell said.
NOW WATCH: Pathologists debunk 13 coronavirus myths
ADVERTISEMENT
See Also:
- GOP Sen. Rand Paul said there were 'silver linings' to coronavirus outbreaks at meat-packing plants and argued recovered employees could return to work on unproven immunity theory
- The historic 20.5 million jobs lost in April is just the beginning. How the coronavirus recession could devastate employment across the US economy.
- 'Painfully evident' damage: Deutsche Bank now thinks the US economy will shrink by nearly 40% in the 2nd quarter following coronavirus lockdowns
SEE ALSO: Germany's daily coronavirus case count has nearly tripled as regions consider an 'emergency brake' to reinstate harsher lockdowns
FOLLOW BUSINESS INSIDER AFRICA
ADVERTISEMENT
Recommended articles
3 African countries could play host to Russian diplomatic missions
Trends in online casino gaming in New Zealand
10 African countries with the highest number of migrants
PHOTOS: Inside the hostel in Rwanda set to house migrants from the UK in July
10 African countries with the weakest governments
Zap unveils Africa's first non-custodial exchange
The future of healthcare on display: Day 1 of Medlab West Africa wraps up
Nigeria suspends a Chinese business over discrimination charges
