Today, the Office for National Statistics (ONS) has revealed that the UK economy shrank by 2.6% in November, following the impact of new lockdown restrictions across the UK.
November’s decline came followed six months of consecutive growth for the economy – with a 0.6% improvement in the previous month.
The ONS data revealed that gross domestic product (GDP) was 8.5% below its pre-pandemic peak.
ONS Director for Economic Statistics Darren Morgan said: “The economy took a hit from restrictions put in place to contain the pandemic during November, with pubs and hairdressers seeing the biggest impact. However, many businesses adjusted to the new working conditions during the pandemic, such as widespread use of click and collect as well as the move online.
“Manufacturing and construction generally continued to operate, while schools also stayed open, meaning the impact on the economy was significantly smaller in November than during the first lockdown. Car manufacturing, bolstered by demand from abroad, housebuilding and infrastructure grew and are now all above their pre-pandemic levels.”
Chancellor of the Exchequer Rishi Sunak said in a statement: “It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face. But there are reasons to be hopeful. Our vaccine roll-out is well under way.”
Jeremy Thomson-Cook, Chief Economist at Equals Money said: “The UK economy contracted in November by 2.6% as the country slowly slipped back into the lockdowns that have been a feature of life since then and through the Christmas period. The services sector remains the hardest hit, and naturally the most valuable to the UK economy as a whole. Given conditions were lighter in November – lower tiers, more businesses able to trade at some level – today’s numbers confirm that Q4 2020 will be the first quarter of the new double-dip recession. There’s a long way to go until we will be able to meaningfully say the UK is growing again and shows of support for both businesses and consumers will be crucial as we head into Budget season.”