UK economy diminishing fastest pace since financial crisis

UK economy diminishing fastest pace since financial crisis

The UK is falling off because of COVID-19 / Image=wikipedia

[Newsphopick=Gyubin Lee] The UK economy shrank at the fastest pace since 2008 in the first three months of the year as Coronavirus forced the country into lockdown. The Office for National Statistics said the economy contracted by 2% in the three months to March, following zero growth in the final quarter of 2019. 

The decline was driven by a record fall in March, and reflects just one full week of lockdown. Analysts expect a bigger economic slump in the current quarter. This is the first official growth estimate since the government introduced social distancing measures at the end of March.

Ruth Gregory, the senior UK economist at Capital Economics, said the figures showed the UK economy was "already in freefall within two weeks of the lockdown going into effect". 

She added: "With the restrictions in place until mid-May and then only lifted very slightly, April will be far worse." While analysts expected a larger quarterly decline of 2.6% in the first three months of the year, it still represents the biggest contraction since the end of 2008, when Lehman Brothers collapsed.

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