UK in first technical recession in 11 years

12 Aug 20

The UK has entered a recession for the first time since 2009, with official statistics showing the largest economic decline on record.

Data from the Office for National Statistics (ONS) show that between April and June 2020, GDP shrank by 20.4% compared with the first quarter of the year.

Following a decline of 2.2% between January and March, this means the UK is in a technical recession, defined as two consecutive quarters of negative growth.

The ONS said that although GDP bounced back by 8.7% in June following the easing of lockdown measures, it remains “a sixth below its level in February”.

Tej Parikh, chief economist at the Institute of Directors (IoD), said:

“These dire figures highlight the painful reality households and businesses across the country are facing.

“The battle now is to prevent longer-term scarring from this plunge in economic activity.”

The IoD has called on the Chancellor to introduce measures to cut the cost of employment, such as by reducing employers’ national insurance contributions, and to look at options for restructuring business loans.

It also recommended “targeted grants to help SMEs adjust to the new normal”.

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