30 Jun 2020
The UK’s GDP fell by 2.2% in the first quarter of 2020, its worst slump since 1979, data confirmed today.
The figure was slightly higher than the Office for National Statistics’ (ONS) initial estimate of 2%.
The drop, caused by the pandemic, is the biggest drop in GDP in Britain since 1979, when it also fell by 2.2%.
The ONS also said Britain’s current account deficit widened by more than expected in the first three months of 2020.
As Reuters reported: “The balance of payments deficit - a long-standing concern for investors because it leaves Britain reliant on foreign inflows of cash - grew to £21.1 billion ($25.9 billion) in the first quarter, compared with a median forecast of £15.4 billion in a Reuters poll of economists.”
In addition, household consumption slumped by 2.9% in the first quarter of 2020, which was, again, worse than expected.
The figures come as the British Retail Consortium and analysts ShopperTrak reveal UK shopping centres are even emptier with footfall down 60.7% on pre-lockdown levels a year ago.
Last week Britain’s biggest shopping centre operator, Intu, collapsed into administration.
In a bid to bolster the UK economy, Prime Minister Boris Johnson will on Tuesday pledge £5bn in infrastructure investment as he promises to “build build build” the UK’s economy out of the coronavirus crisis.
Taking inspiration from former U.S. President Franklin Delano Roosevelt’s “new deal” after the 1930’s Great Depression, Mr Johnson is expected to say that he will seek to create jobs and fuel investment through a nationwide building campaign.
Read the latest news update: UK business confidence edges up, but remains near all-time low