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 5.8% 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.”