The latest data from the Office for National Statistics shows that the British economy shrank 2.6% in November! Unfortunately, economists are warning that the third lockdown is likely to trigger a second wave of recession in the UK.
The marked drop in the UK’s GDP in November was the first since April, when the UK was first closed. The latest data published by the Office for National Statistics (ONS) shows that in the penultimate month of 2020, the British economy contracted by 2.6%, a significant drop, but still less than expected. By economists, a decrease in GDP by 5-7 percent. Earlier, in the months from May to October, the GDP index recorded increases (in October this increase was 0.6%), while the economic contraction in November was clearly the result of the second close, which was introduced for a period of four weeks from November 5 to December 2. The economy suffered from restrictions imposed to contain the epidemic in November, with bars and hairdressers affected the most. However, many companies have adapted to new business conditions during the pandemic by using a large-scale “click-to-go” system in addition to moving online, said Darren Morgan, director of economic statistics at the Office for National Statistics.
The UK faces a second wave of recession
Unfortunately, although the decline in GDP in November was less than what economists had expected, the situation in the UK is definitely not good. Annually, the drop in GDP in November was 8.9%, while the latest estimates indicate that the UK economy contracted by 8.5% compared to February 2020. The Bank of England recently provided a helping hand, increasing the bond-buying program to 900 billion pounds, It’s hard to expect now, just a few months later, that the Bank of England will release another bailout. Nobody basically doubts that the UK, devastated by the scale of the Coronavirus pandemic and third lockdown restrictions, is heading towards a second wave of recession.
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