British Economy Shrinks More Than 20 Percent Due to Corona Crisis
The UK economy shrank by more than 20 percent in the second quarter as a result of the corona crisis. This is the most substantial economic setback in a major European country in the recent period.
In fact, the United Kingdom’s economy was hit harder than Spain’s, which contracted 18.5 percent.
This has emerged from new figures from the British statistics office. Economists had already foreseen the sharp decline. Earlier data showed that hundreds of thousands of Britons had lost their jobs due to the crisis.
According to experts, Britain appears to be paying a high price economically for the slow imposition of lockdown measures in March.
The country also has the uppermost number of deaths from the coronavirus in Europe. Due to sometimes unexpected local sources of contamination, concerns about additional lockdown measures have recently increased again. Another factor economically is that the British government is phasing out wage support schemes still.
In addition, Brexit is creating a lot of uncertainty. British companies face high trade tariffs if the London government fails to negotiate a trade deal thru the European Union earlier the end of the year.
The Bank of England recently stated that the British economy would likely need more time to recover from the corona crisis than previously thought. As the situation stands now, it will probably not be possible to get the UK economy back to its December 2019 level until the earliest by the end of next year, the central bank predicted.
In May, the Bank of England had said that the economy could return to pre-crisis levels in the second half of 2021.
But the recession will probably turn out to be a little less sharp, according to the forecasts last week. The UK economy appeared to be on track for an overall contraction of 9.5 percent by 2020, the worst performance in 99 years or since the harsh years after World War I.
In May, the Bank of England still expected an economic boom of 14 percent. That had been the worst financial blow in more than three centuries.