Early estimates suggest that the UK’s GDP fell by a record 9.9% in 2020, according to the Office for National Statistics (ONS).
Gross domestic product (GDP) is a measure used to calculate the market value of all goods and services produced in a country during a specific time period. In 2009, the UK’s GDP slumped by -4.1% – the previous deepest slump since comparable records began.
The significant fall in GDP can largely be attributed to the economic impacts of the Coronavirus pandemic. Through national and local lockdowns spanning much of 2020, large parts of the economy were closed.
The UK’s first national lockdown from March 2020 saw the closure of many parts of the economy, including all non-essential retail, hospitality and many businesses in the construction sector also temporarily suspended their operations. In the second half of 2020, hospitality outlets faced restrictions on their operations and most have now been closed since November’s lockdown. Nightlife, clubs and similar venues have been closed since the start of the first national lockdown.
The loosening of Coronavirus restrictions during the summer months saw a notable economic recovery, however, GDP fell by 2.3% in November as new national lockdown restrictions were implemented in England.
In December, GDP grew by 1.2% following the November lockdown, though UK nations have since entered new national lockdowns, prompting fears over further hits to the economy.
It is hoped that Coronavirus vaccines will allow economic recovery and growth to take place in the future, but until then, the Government will likely face pressure to continue to support businesses and people across society who have been hit hard by the pandemic’s economic impacts.