UK economy takes worst hit in 300 years — ONS

The contraction in 2020 “was more than twice as much as the previous largest annual fall on record,” accordint to a statement  ONS deputy national statistician Jonathan Athow.

The economy grew 1 per cent in the fourth quarter,  more than expected,  but has not recovered to 2019 levels, according to the release. The outlook is dark for 2021.

UK output was down 7.8 per cent from the final quarter of 2019, twice the decline in Germany and three times the drop in the US, according to the Financial Times report. The differences reflect long periods of tough restrictions in the UK, and the more generous, and more effective stimulus support in other nations.

In fact, the UK recovery is clearly taking place at a slower pace than in other nations in Europe, the ONS report shows. Within output, all four sub-sectors saw annual declines: Services fell by 8.9 per cent; production fell by 8.6 per cent; construction fell by 12.5 per cent and agriculture fell by 9.4 per cent according to the ONS report.

“The monthly path of GDP in Quarter 4 2020 reveals the impact of the differing degrees of restrictions in place. GDP increased by 0.6 per cent in October, where health had the largest contribution because of an increase in the volume of activity, partly due to the coronavirus testing and tracing schemes across the UK. In contrast, accommodation and food service activities acted as a large drag on growth in October as tightening coronavirus measures had an adverse impact on trade and a subsequent lack of demand, the ONS report said.