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Britain’s crippled lockdown economy smashed all records in April when the nation’s output plummeted by more than a fifth, official figures revealed today.
The remarkable 20.4 per cent dive in GDP — even deeper than most City forecasts — came in the month when Boris Johnson’s strict “stay at home” order was in force for all 30 days.
However, there was also some hope for a recovery as analysts said April would mark the low point of the Covid slump following the start of lockdown relaxation in May — and new figures showed a 7,000 decline in new weekly coronavirus cases to just over 31,000.
Today’s unprecedented data from the Office for National Statistics will underline just how much ground has been lost while shops, restaurants and many factories were closed, with economists warning it will take years to recover.
The “econogeddon” fall in activity was nearly four times larger than the previous monthly record of 5.8 per cent set in March this year.
It also dwarfs the six per cent of output lost during the 18 months of economic contraction after the financial crisis of 2008. Before the pandemic, the biggest drop recorded in a month was 2.2 per cent in June 2002, when there were two extra Bank Holidays to mark the Queen’s Golden Jubilee.
Over the three months to April, Britain’s output fell by 10.4 per cent. The loss of more than £50 billion of economic output over the period is equivalent to the annual GDP of Croatia.
The grim figures came as an exclusive Ipsos MORI poll for the Evening Standard revealed that seven in 10 people think the economy will get worse in the year ahead.
Just 22 per cent think things will improve, while 69 per cent think the worst is yet to come, matching the gloom seen in the world crash at the end of 2008.
Chancellor Rishi Sunak said: “In line with many other economies around the world, coronavirus is having a severe impact on our economy.
“The lifelines we’ve provided with our furlough scheme, grants, loans and tax cuts have protected thousands of businesses and millions of jobs — giving us the best chance of recovering quickly as the economy reopens.
“We’ve set out our plan to gradually and safely reopen the economy. Next week, more high street shops will be able to open again as we start to get our lives a little bit more back to normal.”
Shadow chancellor Anneliese Dodds said the Government needs to “get a grip” on the coronavirus test-and-trace system because “it is holding us back economically as well as in health terms”.She told BBC Breakfast: “If we don’t have it functioning as well as in other nations, then we risk seeing additional lockdowns and much slower reopening than would otherwise occur.”
“The evidence that we have seen suggests the closer you are to somebody who has got the disease, the more likely you are to get it,” he told LBC Radio. “So please try to at least be one metre. If you can be two metres great, but we realise there is going to have to be some flexibility.”
The worst affected sector over the three months was construction with a fall of 40.1 per cent, followed by manufacturing on 24.3 per cent and services on 19 per cent.
Jonathan Athow, from the ONS, said: “April’s fall in GDP is the biggest the UK has ever seen, more than three times larger than last month and almost 10 times larger than the steepest pre-Covid-19 fall. In April the economy was about 25 per cent smaller than in February. Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.
“Manufacturing and construction also saw significant falls, with manufacture of cars and housebuilding particularly badly affected.
“The UK’s trade with the rest of the world was also badly affected by the pandemic, with large falls in both the import and export of cars, fuels, works of art and clothing.”