A man wearing a mask as a preventative measure against the spread of Covid-19 is walking in London.
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The British economy shrank by 9.9% in 2020, its largest annual contraction since records began, as the coronavirus pandemic devastated economic activity.
In the last quarter of the year, the gross domestic product (GDP) grew by 1% according to the Office for National Statistics when the country reintroduced nationwide lock-in measures in an effort to combat the revival of Covid-19 business.
The annual contraction of 9.9% is more than twice as large as in 2009 in the wake of the global financial crisis.
Economists surveyed by Refinitiv expected an annual decline of 8% in 2020 with a fourth-quarter expansion of 0.5%. This follows a revised decline of 16.1% in the third quarter as social, travel and business restrictions were eased.
As of Friday morning, the UK had recorded more than 4 million cases and 115,000 deaths, according to data compiled by Johns Hopkins University. The United Kingdom has been infected by new and more transmissible variants of the virus in recent months.
Hitesh Patel, portfolio manager at Quilter Investors, said the UK had experienced an “annus horribilis” in the form of the ‘trifecta’ of a public health crisis, economic closures and uncertainty surrounding Brexit.
‘However, 2020 is in the past and the UK is likely to have a promising second half of the year ahead given the success of vaccine vaccination,’ he said.
“It can be easily derailed if one of the mutations prevents the vaccines from taking proper effect, but for the time being a double recession has been avoided and soon blockages could be a thing of the past.”
England remains in a nationwide exclusion with no clear end date, although British Prime Minister Boris Johnson confirmed on Wednesday that about one in four adults, about 13 million people, have now received the first dose of Covid vaccine.
The monthly GDP in December increased by 1.2% from the previous month, but remained 6.3% below the level of February 2020. The GDP of the fourth quarter remained 6.6% below the level seen in the fourth quarter of 2019.
The services sector grew by 1.7% in December and shrank by 3.1% in November, while production reached its eighth consecutive month of growth, the ONS said, although its smallest slope since May 2020.