Coronavirus: The economic blow in the UK is worse than previously thought

Coronavirus: The economic blow in the UK is worse than previously thought

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At the end of March, there was a sharp drop in consumer consumption, according to ONS

The UK economy shrank more than originally thought between January and March, reaching 2.2% in the overall biggest drop since 1979, official figures show.

The Office for National Statistics (ONS) revised a previous estimate of a 2% reduction, with all major economic sectors giving up.

There was a significant economic impact in March, as the coronavirus fermentation began to take effect.

The data comes after the prime minister was appointed for the main speech on the economy.

Jonathan Athow, deputy national statistician at ONS, said: “Our more detailed picture of the economy in the first quarter showed that GDP shrank a little more than first estimated.

“Information from the government has shown that health activities have dropped more than we have shown before.

“All major sectors of the economy shrank significantly in March as the effects of the pandemic.”

The contraction in the first quarter is now the joint biggest drop from the period from July to September 1979.

Mr Athow said: “The sharp drop in consumer spending at the end of March has led to a significant increase in household savings.”

New figures from Tuesday meant that the year-on-year growth rate in the first quarter was revised to 1.7%, from 1.8%.

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But with the lock of the coronavirus coming into force only on March 23, the second quarter will show a full hit for the economy.

Recent monthly data from the ONS showed that the economy fell 20.4% in April – the biggest drop in a month since records began.

That decline was three times the decline recorded during the entire economic downturn from 2008 to 2009.

Samuel Tombs, the UK’s chief economist at Pantheon Macroeconomics, said the latest data could be summarized in one line: “The biggest contraction in 40 years, even though Q1 contained only nine outages.”

The data is “just an introduction” even worse, he added.

Later Tuesday, Boris Johnson is scheduled to give a keynote speech on the economy, promising to “build better back”.

Speaking in the West Midlands, the prime minister will say he wants to use the coronavirus crisis “to tackle the country’s great unresolved challenges”.

As part of what he is expected to call a “new contract,” Mr. Johnson will set out plans to accelerate spending by £ 5bn on infrastructure projects.

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