DOWN IN THE SLUMPS!
Economy figures worse than expected in plunge not seen since 1979
THE UK economy shrank more than first thought between January and March, contracting 2.2 per cent in the largest fall since 1979, official figures show.
And experts say there’s WORSE to come.
The Office for National Statistics (ONS) revised down its previous estimate, with all the main economic sectors dropping.
There was a significant economic impact in March, as the coronavirus pandemic began to have an effect.
The data comes as the Prime Minister delivered a major speech on the economy, promising a huge spending spree.
Jonathan Athow, of the ONS, said: “Our more detailed picture of the economy in the first quarter showed GDP shrank a little more than first estimated.
“All main sectors of the economy shrank significantly in March.”
The first-quarter contraction is now the joint biggest drop since the July-to-September period in 1979, which followed the crushing Winter of Discontent.
The services sector – which accounts for about three-quarters of UK income – shrank by a record 2.3 per cent.
Production output fell by a revised 1.5 per cent in the three months, driven by declines in manufacturing as factories temporarily shut down, while there was a fall in construction output of 1.7 per cent.
When compared with the same three-month period a year ago, the economy shrank by 1.7 per cent.
But as the coronavirus lockdown only came into force on March 23, the second quarter will show the full hit on the economy. Recent ONS monthly figures showed the economy plummeted by 20.4 per cent in April – the largest drop in a single month ever and three times greater than the decline seen during the whole of the 2008 to 2009 economic downturn.
Economist Samuel Tombs, said the latest figures could be summed up as: “The biggest contraction for 40 years, even though Q1 contained just nine lockdown days.”
The data “was just the prelude”, with worse to come, he added.