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The United Kingdom's economy is officially in recession after a record drop of 20.4 percent in the Gross Domestic Product (GDP) in the second quarter of 2020.
The Office for National Statistics (ONS) of the United Kingdom (UK) reported on Wednesday gross domestic product (GDP), the broadest measure of economic prosperity, fell in the second quarter of the year by 20.4 percent compared with the previous three months. The slump is described as the most significant quarterly decline since comparable records began in 1955.
After a decline of 2.2 percent in the first quarter, the figures confirm the UK economy plunged into recession after the Covid-19 outbreak spread in March, and the government imposed a nationwide lockdown to contain it. Economists consider two consecutive quarters of shrinking GDP as the technical definition of a recession.
The ONS said Britain's economy shrank by more than any other major nation (G7) during the coronavirus outbreak in the second quarter of 2020 and almost doubled the 10.6 percent fall in the United States over the same period. The downturn is also deeper than any other country in the European Union and surpassed a 12.1 percent quarterly drop in the eurozone.
Rishi Sunak, the Chancellor (head of Her Majesty's Treasury), said many people would lose their jobs in the coming months. "I've said before that hard times were ahead, and today's figures confirm that hard times are here," he pointed out.
The ONS said the decline in the second quarter was widespread, with a dramatic plunge in output across the services, production, and construction industries.
Reflecting the public health restrictions and forms of voluntary physical distancing in response to Covid-19, it said the pandemic had erased 17 years of economic growth in only two quarters, taking the level of GDP back to the equivalent position in June 2003.