Economy endures ‘largest quarterly fall since 1979’

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07.17 p.m., June 30, 2020.

(Updated June 30, 2020 at 11:52 am)

The UK economy contracted more sharply than expected in the first quarter of the year, when the coronavirus crisis, according to official reports, picked up speed.

An update of the Office for National Statistics (ONS) for the first three months of 2020 showed that gross domestic product (GDP) fell 2.2% compared to the previous quarter.

It had previously given an initial value of 2%.

Analysts said the revised number means that the economy has seen its worst quarterly decline since 1979.

However, this statistic is expected to blow up when the second quarter ends from April to June.

The ONS has already reported a GDP down 20.4% Cover April alone – a sign of the deepest slump in living memory as the impact of Britain Corona virus In spite of government support for companies and wages, barriers are implemented.

The latest Treasury numbers released later Tuesday showed that the three bank-managed loan programs provided just over a million loans to businesses for a total of nearly £ 43 billion.

The job retention program for workers on leave supported the wages of 9.3 million workers on Sunday, the numbers showed, and to date has cost GBP 25.5 billion.

Jonathan Athow, deputy national statistician at ONS, said: "Our more detailed picture of the economy in the first quarter showed that GDP shrank slightly more than initially thought.

"This is now the largest quarterly decrease since 1979.

"Government information showed that health activity was declining more than before.

"All major economic sectors contracted significantly in March due to the impact of the pandemic.

"The sharp drop in consumer spending at the end of March led to a significant increase in household savings."

The ONS figures also showed that the current account deficit – a measure of trade in which the value of imported goods and services exceeds the value of exported products – widened more than expected in the three months.

The balance of payments deficit rose to GBP 21.1 billion.

Economists had expected a figure closer to £ 16bn.

The ONS released its data when the government stepped up its support efforts economic recoveryPrime Minister Boris Johnson announced plans to accelerate the "infrastructure revolution" in Britain and cut red tape.

After a return to the era of austerity measures after the financial crisis was ruled out, funding for the spending spree triggered a debate in which the pressure on the government increased to announce targeted tax increases to offset a forecast budget deficit No such thing has been seen since the end of World War II.

Dr. Jonathan Gillham, PwC chief economist, said of the ONS figures: "These data underscore the unprecedented impact of the ban on the UK economy and show that Britain is going into recession.

"Despite the gloom, it is broadly in line with expectations given the extent of the blockage required to meet the challenges of COVID-19."

(tagsToTranslate) News – Coronavirus: economy continues

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