Europe

COVID Hits UK Economy Harder Than Other Developed Economies

The impact of the coronavirus in Europe hit the United Kingdom (U.K.) especially hard.

The Wall Street Journal reported England, Scotland, Wales and Northern Ireland saw its gross domestic product, the value of goods and services, shrink more than 20 percent in the second quarter (Q2) to an annualized rate of nearly 60 percent as the nations recorded the highest death toll from COVID-19, according to the Office for National Statistics, the independent agency responsible for collecting data on the economy and its residents.

“It’s been a rough few months,” Richard Swart, global sales and quality director at Berger Global, a Durham, England-based unit of Ringmetall AG, the German manufacturer for the packaging industry, told the WSJ.

May and June sales fell by as much as 40 percent depending on the industry being supplied, he said. While sales improved in July and August, they remain sporadic as customers continue to be uncertain, he added.

“Everybody clings to the hope that there will be a vaccine, that’s the ultimate fix,” Swart told the newspaper.

While the region has seen lockdown restrictions ease and workers return to factories and offices, the Bank of England (BOE) has warned that it could take 17 months to regain the ground lost during the pandemic.

In contrast, the U.S. and Germany lost about 10 percent of their output, Italy 12 percent, France 14 percent and Spain 19 percent. U.K. officials ordered the economy to shutter for most of Q2, starting in late March weeks after other European countries, and gradually eased restrictions starting in late May, the WSJ reported.

One of the factors that contributed to the U.K.’s sinking economy is the region depends on activities that require personal contact. The BOE estimated spending on movie or theater tickets, dining out, or attending sporting events, comprise 13 percent of Britain’s total output, compared with 11 percent in the U.S. and 10 percent in Europe.

The coronavirus took its toll in the U.K. with 46,000 deaths, the highest tally in Europe and the fourth largest in the world after the U.S., Brazil and Mexico.

That’s equivalent to nearly 700 deaths per million residents, exceeding the toll in Germany, France, Spain, Italy and the U.S. on a per capita basis, the WSJ reported.

“We responded really late, and in a chaotic manner,” Linda Bauld, professor of public health at the University of Edinburgh told the newspaper.

Officials of the U.K. government have insisted they acted swiftly and in line with scientific advice.

——————————

LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

TRENDING RIGHT NOW