The UK has entered a long-feared recession as a result of the coronavirus crisis.
It is the first time the UK has recorded two consecutive quarters of negative growth in 11 years, as economic activity dived 20.4 per cent between April and June compared to the first quarter of the year.
While the latest data also indicates a slight rebound in June in line with the easing of lockdown restrictions, it is looking unlikely that a much-lauded ‘V’ shaped economy will materialise.
Poppy Trowbridge, a former adviser to chancellor Philip Hammond told Times Radio this morning that the UK recession has been sharper than in Spain and other European countries, branding it the deepest recession in UK history and the deepest of any G7 economy.
“What do you expect?” she said. “It won’t surprise anyone who lost their job in March. These numbers don’t tell them anything they don’t know…It could have been much worse and we would still feel the same about the last few months.”
Quilter Investors portfolio manager Hinest Patel says: “Today’s GDP figures confirm the UK is in recession, one that will likely take a considerable amount of time and effort to get over. This is not a normal recession after all. However, the long, slow road to recovery is underway, just not at the speed we were all hoping for during the initial national lockdown.
“Economic output remains at a fraction of what it was in February, and as such it is clear further stimulus is going to be required. The UK relies so heavily on the services sector and consumer consumption. With the government potentially coming to the maximum limits of reopening that is possible and favouring localised lockdowns in the future to prevent further economic reckonings, they need to get people consuming as much as they can.
“However, the fact of the matter is that many industries still going to struggle through the recovery.”
Premier Miton UK equities investment manager Jon Hudson says: “Having underperformed all our European neighbours, today’s GDP figures show the heavy price the UK has paid for being slower to enter a lockdown. The recovery has already begun however, with June showing an almost 9 per cent improvement on May.”