The UK’s economy shrank by 2% in the three months to 31 March 2020, as a result of the Covid-19 pandemic.
This is according to new data from the Office for National Statistics (ONS), which also found that gross domestic product (GDP) fell by 5.8% during March, the largest fall since monthly records began in 1997. This reflected widespread falls in services, production and construction output.
Notably, the ONS said the slump in GDP in March 2020 occurred within a single month. During the global financial crisis, from the peak in February 2008 to the lowest point of March 2009, a total of 13 months, GDP contracted 6.9%.
The ONS said the accommodation and food services industry has been significantly affected by the Covid-19 pandemic, falling by a “record” 31.1% between February and March 2020.
It added that given the scale of the fall it is evident that demand fell as part of consumer reaction to social distancing measures. From 23 March 2020, many of the businesses in these industries were required to cease their normal operating practices, which had a significant impact on hotels, camping sites, restaurants, pubs and bars among others.
The ONS also received some responder-led evidence of changes in business activity, including restaurants and pubs moving to home delivery. However, it noted the positive effect of these changes in operating practice has “not had a large enough effect” to offset the negative effects of widespread closures.