GDP tumbled by 2.6 per cent in November as second coronavirus lockdown hammered the economy
- GDP fell again in November as the four UK nations imposed fresh restrictions
- Brought an end to six consecutive months of recovery for the UK economy
- Warnings that the new lockdown mean a double-dip recession is ‘inevitable’
GDP tumbled by 2.6 per cent in November as the second coronavirus lockdown hammered the economy, official figures showed today.
Restrictions in force in all four UK nations sparked another slump in activity after six months of improvement following the emergence of the disease.
The impact was more limited than many analysts feared as firms managed to find ways of working around the curbs. But it means the economy was still 8.5 per cent smaller in November than in February.
Business groups warned that any December rally will have been smothered by the harsh ‘tier’ controls in England, and a double-dip recession now looks ‘inevitable’ with the new even tougher draconian to tackle mutant Covid.
ONS Director for Economic Statistics Darren Morgan said: ‘The economy took a hit from restrictions put in place to contain the pandemic during November, with pubs and hairdressers seeing the biggest impact.
GDP tumbled by 2.6 per cent in November as the second coronavirus lockdown hammered the economy, official figures showed today. In this chart, 100 represents the size of the economy in 2018
‘However, many businesses adjusted to the new working conditions during the pandemic, such as widespread use of click and collect as well as the move online. Manufacturing and construction generally continued to operate, while schools also stayed open, meaning the impact on the economy was significantly smaller in November than during the first lockdown.
‘Car manufacturing, bolstered by demand from abroad, housebuilding and infrastructure grew and are now all above their pre-pandemic levels.’
British Chambers of Commerce head of economics Suren Thiru said the latest figures ‘highlight the continued damage being done to the UK economy’.
‘The decline in output in November was largely driven by the drag on activity from the second lockdown, with consumer-focused services firms, who are most exposed to lockdown restrictions, enduring a particularly difficult month,’ he said.
‘With any post-lockdown rally in output in December constrained by the tougher tiered restrictions, including the introduction of tier 4 measures, the UK economy is likely to have contracted in the final quarter of 2020.
‘A third lockdown means that a double-dip recession in the first quarter of this year may be inevitable, particularly if the current post-Brexit disruption persists through the quarter.
Rishi Sunak is facing a tough task to manage the economy with his Budget due in March
Shadow chancellor Anneliese Dodds said: ‘The UK has already had the worst recession of any major economy and now we’re in danger of a devastating double dip.
‘Instead of securing our economy, the Chancellor is winding down economic support and hitting families with a triple hammer blow of pay freezes, a cut to universal credit and a hike in council tax.’