UK's GDP Drops 20% to Record Worse Performance in 65 Yrs

The British economy posted its biggest quarterly decline between April-June 2020, and has officially entered into recession, as the gross domestic product (GDP) fell by 19.8% in the second quarter, the biggest fall on record, according to data from the Office for National Statistics (ONS).

The plunge in GDP estimates is marginally lower than the previous second-quarter of 20.4%, yet, after recording two consecutive quarterly falls, the UK is officially facing the biggest recession ever.

The ONS said the economy's historic decline is the largest since the quarterly records began in 1955, and it reflects the containment policies applied against the COVID-19 pandemic.

UK has suffered one of the worst declines in economic activity in Europe this year, and more deaths from COVID-19 have been recorded with more than 41,000 fatalities.

GDP estimates in Q1 2020 also showed a sharp decline of 2.5% from 2.2% in previous estimates.

Also, Britain is expected to entirely exit the European Union (EU) in three months, and Prime Minister Boris Johnson's government has not yet reached a trade agreement with the bloc.

"The government bears the bulk of the recession, not households nor companies," said Ruth Gregory, chief UK economist at Capital Economics. "But with the recovery already slowing, the fiscal support waning and the full range of the unemployment spillovers not yet being felt, recession is felt in the second half of 2020."

Meantime, the British sterling slipped 0.3% on Wednesday against the US dollar.