Growth in the UK economy slumped by record 9.9% in 2020, the biggest annual crash in output in more than 300 years.
But it looks like it avoided again dipping into recession at the end of last year and chances are improving for a recovery in 2021.
The fall is also steeper than almost any other major economy, though Spain – also hard-hit by the virus – reported an 11% decline for the year.
Britain has reported Europe’s highest death toll from COVID-19 and is among the world’s highest in terms of deaths per head.
The 9.9% annual contraction was more than twice that seen in 2009 in the aftermath of the GFC, and topped the 9.7% slump during the crisis of 1921.
Fourth-quarter USGDP remained 6.6% below the level seen in the fourth quarter of 2019.
Official figures showed gross domestic product (GDP) grew 1.0% between in the December quarter, higher than expected by economists.
By way of comparison, the US economy shrunk by3.5% last year, the German economy contracted by 5.3% but the Chinese economy grew by 2.3%.
According to Britain’s the Office for National Statistics the economy grew 1.2% in December, after a 2.3% drop in November when there was a partial lockdown. That left output 6.3% lower than in February before the start of the pandemic
This makes it likely that Britain will escape two straight quarters of contraction – the standard definition of recession – even though the economy is set to shrink in the first quarter of 2021.
The Bank of England has forecast the economy will shrink by 4% in the first three months of 2021 due to the new lockdown and continuing disruption from Brexit.
The central bank thinks it will take until early next year before it regains its pre-COVID size, assuming vaccination continues to smoothly. Many economists think it will take longer.
Like in every other major economy the impact of the pandemic and the lockdowns has been hardest on the services sector – output there was down 7.2% against manufacturing’s 2.5% slide over the year (compared to 2019).
But The services sector grew by 1.7% in December after shrinking by 3.1% in November.
The impact of the pandemic has been highly uneven. Some sectors such as manufacturing showed output just 2.5% below year-ago levels in December, while the much larger services sector was 7.2% below.
