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%.
Despite this, there was an increase in consumer demand for some goods, mainly because of the effects of retail “panic buying”, which led to growth in a small number of manufacturing industries.
The ONS said: “Analysis of our Monthly Business Survey (MBS) returns and external data, including comments from over 10,000 businesses, demonstrated that the arrival of the coronavirus (Covid-19) pandemic had a significant and broad-based negative impact on output during March 2020, though some industries did see a positive impact.
“This was caused by a complex mix of factors, including the effects of social distancing, which led to a fall in consumer demand, business and factory closures and supply chain disruptions.”