Britain is to be officially declared in recession for the first time since the financial crash with figures set to show the COVID-19 crisis triggered a record economic slump.
The dramatic 21% downturn between April and June – the worst in western Europe – is expected to be confirmed by the Office for National Statistics (ONS) on Wednesday after a 2.2% fall in the first three months of 2020.
A recession is defined as two successive quarters of decline in gross domestic product (GDP), which has not been seen in the UK since the financial crisis back in 2008.
It comes after separate data showed around 730,000 jobs in the UK been lost since March when the coronavirus lockdown began, bringing the economy to a near standstill.
Employment also plummeted by the largest amount in a quarter since 2009 between May and June.
However, despite the expected GDP slump, experts will be examining closely the monthly figure for June with predictions it will show a sharp 8% rebound as COVID-19 lockdown restrictions were eased further.
This follows a much lower than expected 1.8% month-on-month rise in May.
The Bank of England said last week that while it expects the downturn to be less severe than first feared, the UK could take longer to recover than previously thought.
It forecasted GDP to shrink by 9.5% this year, having warned in May of a 14% fall in 2020.
However, it dampened hopes of a V-shaped recovery, saying the economy is not expected to jump back to pre-virus levels until the end of 2021.
Philip Shaw, chief economist at Investec Bank, said: “We are forecasting a monthly increase of 8.1% as more of the economy, such as ‘non-essential’ retailing, opened up in mid-June.”
He added: “July’s figures next month should contribute strongly to a material rebound in the third quarter, but the test will come in the autumn when there are no further ‘lockdown releases’ to boost the economy, some restrictions (perhaps just local) are imposed and programmes such as the furlough scheme are wound up.”
UK nosedives into recession after COVID-19 triggers record slump
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