A pedestrian walks past closed shops on an empty Regent Street in London on April 2, 2020, as life in the UK continues during the nationwide lockdown to fight the coronavirus pandemic.
The UK published the largest monthly decline in GDP (gross domestic product) in the country’s history in April, according to the Office for National Statistics.
GDP fell by 20.4% compared to the previous month, a sharper decline than the 1
During the three months to the end of April, the economy declined by 10.4% compared to the previous three-month period, ONS also confirmed, which again fell below analyst expectations of a 10% decline.
Britain went into lockdown on March 23 in an effort to curb the spread of coronavirus pandemics, but has confirmed 292,860 infections as of Friday morning, according to Johns Hopkins University data. Some measures began to be eased in May, but the vast majority of the UK economy was stunted throughout April.
“GDP figures for the first quarter highlighted the damage caused by just the first few weeks of shutdown – the Q2 estimates expected later this month will show production in a crater,” said Ed Monk, associate director of personal investment at Fidelity International.
“But as social distance measures begin to relax, companies that are slowly returning to work and moving to open resale stores from Monday, the economy will gradually reopen and hopefully the growth rate will return in the coming months. The question is how much and the ability of companies Keeping fluid and retaining staff is now the key. “
Sterling was fairly steady following the data sale and was trading at $ 1.2575 on Friday morning London time. Howard Archer, the chief financial adviser for the EY ITEM club, said in a note that the country’s economy is likely heading for a “substantial record contraction in the second quarter”, which may exceed 13%.
“Assuming that the government continues to gradually relax the restrictions in the shutdown, the economy is expected to begin returning to clear growth in the third quarter. Increased consumer demand after the shutdown should help, while global economic activity should also be stronger from the later months of 2020. “There will be challenges, where unemployment is likely to increase significantly in the coming months,” he said in the note.
The UK is still locked in trade talks with the EU and has not yet completed its split with the bloc. Business groups have warned of the dangers of a Brexit scenario that does not act as the coronavirus pandemic risks preventing calls this year.
On Wednesday, the OECD warned that Britain was likely to be the hardest hit developed economy as it predicted that UK GDP would decline by 11.5% by 2020, slightly worse than Italy and France’s forecast decline and potentially even more (by 14%). second wave of infections.
Moody’s rating agency warned in a report Wednesday that a Brexit without a deal would “significantly damage Britain’s potential fragile recovery from its deepest recession in almost a century” after the pandemic.
—CNBC’s Holly Ellyatt contributed to this article.