The United Kingdom formally suffered its worst recession in 300 years in 2020, latest estimates have shown today, but it is hoping to escape a double recession after a positive economy in the last three months.
The country has experienced a high death rate in Europe and the government has implemented stringent lock-down measures to try to avoid the spread of the virus to its predominant service sector. The country has suffered a hammer blow.
In the fourth quarter, GDP increased by 1 percent, stronger than some analysts had predicted, which eased concerns of another full-blown recession after last spring’s historic plunge.
Although service operation grew following the relaxing of business constraints in the first half of December 2020, “this was most significant in some services industries” explained the ONS.
However, the Office of National Statistics reported that the economy had plummeted by 9.9 percent over the entirety of last year, amid the minor encouraging news – Europe’s worst annual result since the Great Frost in 1709.
Willem Sels, HSBC’s CIO, private banking and wealth management, said “it remains unclear when lockdowns will end, and whether consumers will rush out to spend on travel and entertainment when they are free to do so” but “rapid vaccinations paint a positive picture for future growth”
“Today’s UK GDP figure has, once again, exceeded early expectations, in common with Q4 releases from across the EU,” he added.
The BoE cut its bank rate to 0.1 percent last year and restarted its bond-buying scheme to provide economic stimulus. Medians in the survey indicate that ultra-loose monetary policy will not be unwinded until 2024 at the earliest.