UK’s 2020 Economy Worst In 300 Years

The economy in the U.K. contracted 9.9 percent in 2020, the worst year on record since 1709, the Office for National Statistics (ONS) said in a report on Friday (Feb. 12). The overall economic drop in 2020 was more than double in 2009, when U.K. GDP declined 4.1 percent due to the worldwide financial crisis. Britain experienced the biggest annual decline among the G7 economies — France saw its economy decline 8.3 percent, Italy dropped 8.8 percent, Germany declined 5 percent and the U.S. contracted 3.5 percent.

The output of goods and services expanded 1 percent between October and December, following 16.1 percent growth in the previous three months. The final quarter of 2020 saw growth in broad economic sectors — services went up 0.6 percent, production increased 1.8 percent and construction went up 4.6 percent.

The U.K. started keeping GDP data in the 1940s, but historical data by the Bank of England (BoE) indicated that the economic situation is now the worst since the year of the Great Frost in 1709, the Independent reported.

The immediate future looks brighter, with the BoE anticipating a quick bounce-back in the spring as vaccinations become more widespread and people start resuming everyday activities like school, shopping, work and entertainment. The U.K. central bank anticipates an economic return to pre-pandemic size by early 2022.

“Loosening of restrictions in many parts of the UK saw elements of the economy recover some lost ground in December, with hospitality, car sales and hairdressers all seeing growth,” ONS Deputy National Statistician for Economic Statistics Jonathan Athow told the Independent. “An increase in COVID-19 testing and tracing also boosted output.”

More than 115,000 people died of causes relating to the COVID-19 pandemic in Britain, the most deaths in all of Europe. Britain locked down for the third time in January since the pandemic began in the spring of 2020, this time due to a variant strain of the virus that is more easily transmitted. Germany and France also imposed restrictions.

The first approved vaccines arrived in the U.K. in December. According to PYMNTS research, 48.8 percent of consumers said they would return to their normal routines once vaccines were available, up from 40.5 percent on March 27 and 39.7 percent on March 17.

January data from the ONS and BoE indicated that debit and credit card purchases in the country plunged 35 percent from pre-pandemic levels.