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The UK’s economy shrank by 20.4 percent in April as the country spent the month under lockdown to stop the spread of coronavirus, data published last week revealed.
The fall is the largest monthly contraction on record and outstripped the then-record 5.8 percent drop of gross domestic product (GDP) in March.
It means that GDP plummeted by 10.4 percent in the three months to April and sets the UK on course for one of its worst quarters in history.
Prime Minister Boris Johnson warned of a “tough” few months ahead for the economy, but added: “We will get through it.
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“We’ve always been in no doubt this was going to be a very serious public health crisis but also have big, big economic knock-on effects.
“The UK is heavily dependent on services, we’re a dynamic creative economy, we depend so much on human contact. We have been very badly hit by this.”
Office for National Statistics figures released on Tuesday showed the damage being caused to the labour market by coronavirus.
Prime Minister Boris Johnson warned of a “tough” few months ahead for the economy
The number of paid employees plummeted by 2.1 percent or 612,000 in May compared with March and there was an increase in benefit claims.
Although the UK jobless rate remained largely unchanged quarter on quarter at 3.9 percent in the three months to April, with unemployment at 1.34 million, there are fears of more redundancies as Government support ends in the coming months.
ONS deputy national statistician Jonathan Athow said: “The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked.”
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Asked if May unemployment figures could reach around 5 percent, Mr Athow said: “That would certainly go in that direction if that 600,000 reduction in payroll goes through into unemployment.
“We haven’t quite seen the downturn feed through into unemployment yet.”
Mr Johnson is under pressure to relax the two-metre social distancing rule to help save the economy.
The next potential easing of the lockdown in England could take place on July 4, with pubs and restaurants desperate to reopen.
The PM is under pressure to relax the two-metre social distancing rule to help save the economy
Asked about the two-metre rule in the Commons, Mr Johnson said: “I am determined to make life as easy as possible for our retailers, for our hospitality industry, but we must defeat this virus.”
Cabinet minister Grant Shapps admitted that the two-metre restriction would make it impossible for some parts of the hospitality industry to survive.
He said “difficult days would lie ahead” if the economy does not pick up and people who are on the furlough scheme, which ends in October, are “concerned about the future of their employment”.
He told BBC Radio 4’s Today programme that the Government faces the task of “restarting the economy but without restarting the virus”.
He added: “You have got to make judgment calls about whether two metres, for example, needs to remain in place or whether you can bring it down.”
Tory grandees have called on the Prime Minister to ease the lockdown measures amid the economic fallout.
Writing in the Daily Telegraph, former Conservative Party leader Lord Hague said that lockdown was a “disaster (that) cannot under any circumstances be repeated”.
There have been 298,136 confirmed cases of coronavirus in the UK and 41,969 people have died, according to the Government’s latest figures.
Published at Wed, 17 Jun 2020 07:45:00 +0000