UK economy contracts most since 1997, GDP down more than 20 percent
Gross domestic product contracted by a more-than-expected 20.4 percent in April from March, when it was down 5.8 percent, data from the Office for National Statistics showed Friday. GDP was forecast to fall 18.4 percent.
In the three months to April, GDP decreased 10.4 percent, which was slightly faster than the expected fall of 10 percent.
Jonathan Athow, Deputy National Statistician for Economic Statistics, said, "April's fall in GDP is the biggest the UK has ever seen, more than three times larger than last month and almost ten times larger than the steepest pre-covid-19 fall."
Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall, Athow added.
Record contractions were registered across services, industrial production, manufacturing and construction in April.
The services sector reported a monthly fall of 19 percent in April versus a 6.2 percent decrease a month ago. The largest contributors to the decline were wholesale, retail and motor trades.
At the same time, industrial output declined by a record 20.3 percent in April from the previous month, with manufacturing providing the biggest downward contribution, falling by a record 24.3 percent.
Economists had forecast industrial production to drop 15 percent after easing 4.2 percent a month ago. Similarly, manufacturing output was expected to decline 15.8 percent versus March's 4.6 percent drop.
On a yearly basis, the decline in industrial production deepened to 24.4 percent from 8.2 percent. Likewise, manufacturing output dropped 28.5 percent versus a 9.7 percent decrease a month ago.
Construction decreased 40.1 percent monthly compared to a 5.9 percent drop in March. Farm output fell only 5.5 percent in April.
Another report from ONS showed that the visible trade deficit narrowed to GBP 7.49 billion from GBP 11.85 billion in March. Exports and imports decreased 14.9 percent and 21.9 percent, respectively.
At the same time, the total trade balance showed a surplus of GBP 305 million compared to a shortfall of GBP 3.95 billion in March. ■