UK economy contracts by record 9.9% in 2020

Britain’s economy, devastated by coronavirus pandemic, contracted by a record 9.9% in 2020 that marks the biggest fall in output in modern official records after the World War Two, while historical data suggest it was the biggest drop since 1709.

The 2020 contraction was bigger than in almost all similar economies, as only Spain suffered bigger drop, falling by 11% in 2020.

Official data showed UK Gross Domestic Product grew 1.0% in the fourth quarter, following 16.1% rebound in the third quarter, making it likely that Britain will escape heading back towards recession, after the economy fell into recession in the first half of the year, following a record 19.8% contraction in the first and second quarter of 2020.

Monthly figures show that Britain’s economy grew 1.2% in December, after November’s 2.3% fall, due to a partial lockdown, leaving the output 6.3% below pre-pandemic level in February 2020.

New wave of coronavirus and effects of Britain’s third lockdown are likely to result in sharp contraction in early 2021, with the Bank of England expecting the economy to shrink by 4% in the first quarter.

The central bank expects rebound in the economy to accelerate once restrictions are eased and assuming vaccination continues to go smoothly but thinks that it will take until early 2022 to return to pre-pandemic levels, while economists predict it will take longer.

The Britain’s economy has experienced a serious shock as a result of pandemic, as the country reported the highest death toll from the virus in Europe and is among the world’s highest, but it has so far vaccinated more people than other European countries, raising the prospect for bounce back later this year.