The British economy shrunk by more than 20% in the second quarter as a result of the corona crisis. It is the strongest economic setback in a large European country in recent times. The UK economy was hit even harder than that of Spain, which had a contraction of 18.5%.
This has emerged from new figures from the British statistical office. Economists had already seen the sharp contraction coming. Earlier, data showed that hundreds of thousands of British people lost their jobs as a result of the crisis. According to experts, the United Kingdom seems to pay a high economic price for the slow introduction of lockdown measures in March.
The country also has the highest number of deaths due to the coronavirus in Europe. Due to sometimes sudden local infestation, concerns about additional lockdown measures have been growing again recently. What also plays an economic role is that the UK Government is phasing out wage support schemes again. In addition, the brexit creates a lot of uncertainty. British companies will face high trade tariffs if the London government fails to conclude a trade agreement with the European Union by the end of the year.
The Bank of England recently stated that the British economy would probably need more time to recover from the coronacrisis than expected. As things stand at the moment, it is likely that the British economy will not be able to return to the december 2019 level until the end of next year at the earliest, as envisaged by the central bank. In May, the Bank of England had said that the economy could return to pre-crisis levels in the second half of 2021.
But the recession is likely to be a little less pronounced, as the forecasts showed last week. The British economy seemed to be on track for an overall 9.5 percent contraction by 2020, the worst performance in 99 years, or since the tough years after the First World War. In May, the Bank of England took a 14% economic blow into account. That would have meant the worst economic blow in over three centuries.