LONDON - The United Kingdom is officially in recession for the first time since 2009, with the economy having contracted by 20.4% quarter to quarter (qtq) in the second quarter (Q2) of 2020.
The contraction was mainly affected by plummeting household spending, which was intensified as shops were ordered to close to curb the spread of the coronavirus (COVID-19).
As reported by the BBC, British Chancellor of the Exchequer Rishi Sunak said the government is “grappling with something that is unprecedented” in a “a very difficult and uncertain time”.
According to the British Office of National Statistics (ONS), between April and June the number of people in work fell by 220,000, while the government’s job subsidies scheme is scheduled to end after October.
“I think most people would agree that [the job subsidies scheme] is not something that is sustainable indefinitely,” Mr Sunak said on Wednesday (12/8).
The UK’s Q2 contraction is the second-highest in Europe, with Spain suffering the worst slump at 22.7% in the period.
The British economy, Mr Sunak claimed, has performed worse than most European Union countries due to its focus on services, hospitality, and consumer spending.
“Those kinds of activities comprise a much larger share of our economy than they do for most of our European cousins,” he said. (MS)