First economic recession since 2009 is confirmed
The UK is expected to be declared in a state of recession today for the first time since the financial crisis, after GDP nosedived by 21 per cent between April and June.
The figure, expected to be confirmed by the Office of National Statistics (ONS), marks the second threemonth period of decline in the nation’s Gross Domestic Product (GDP) – and the worst second-quarter contraction in western Europe.
The rapid plummet of GDP follows a 2.2 per cent fall from January to March, marking the first consecutive periods of decline since 2009.
It comes amid reports Rishi Sunak may consider delaying his autumn budget in the event of a second spike of the virus.
The chancellor is understood to be keen to begin the process of rebuilding the economy from the impact of the pandemic, the Financial Times reports, but is apprehensive about committing to spending if further lockdowns are necessary.
Speaking to the publication over the spending plan being published in autumn, a source close to Mr Sunak said: “While it’s very likely to happen there remains an element of uncertainty.
“If we have a series of local lockdowns and second spike it’s not clear that would be the right time for a budget.”
ONS data has shown around 730,000 UK workers have been removed from the payrolls of British companies since March, when the coronavirus lockdown began, with employment also dropping by the largest amount in a single quarter since 2009.
The Bank of England has already suggested that it expects the downturn to be less severe than first feared – however officials also anticipate recovery could take longer than previously predicted.
GDP was forecasted to shrink by 9.5 per cent this year by the bank, which had warned in May of the potential of a 14 per cent slump across 2020.
However, hopes of a V-shaped recovery were dashed, with the bank saying the economy is not expected to jump back to pre-virus levels until the end of 2021.