{"id":42077,"date":"2020-08-12T08:18:30","date_gmt":"2020-08-12T07:18:30","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=42077"},"modified":"2020-08-12T08:18:55","modified_gmt":"2020-08-12T07:18:55","slug":"uk-officially-enters-recession-for-first-time-in-11-years","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/uk-officially-enters-recession-for-first-time-in-11-years\/","title":{"rendered":"UK Officially Enters Recession For First Time In 11 Years"},"content":{"rendered":"

The United Kingdom has officially fallen into recession for the first time in 11 years.<\/p>\n

The reasons is due to the impact of the coronavirus pandemic, reports say.<\/p>\n

Britain officially entered recession, with data set showing a collapse of around 20 percent of gross domestic product in the second quarter \u2014 the worst contraction in Europe.<\/p>\n

The Office for National Statistics is uniformly expected to confirm the unprecedented contraction between April and June.<\/p>\n

It is Britain\u2019s first recession since the 2008 financial crisis.<\/p>\n

The predicted drop in output reflects the mammoth fall in economic activity nationwide during the quarter due to the lockdown imposed to tackle the pandemic.<\/p>\n

Economists polled by Bloomberg have on average predicted a decline of 20.7 percent in the second quarter, compared to the first three months of the year.<\/p>\n

The UK economy contracted by 2.2 percent in the first quarter and, with a recession defined as two successive quarters of decline, the data on Wednesday will herald the country\u2019s first in a decade.<\/p>\n

lockdown imposed to tackle the pandemic.<\/p>\n

Economists polled by Bloomberg have on average predicted a decline of 20.7 percent in the second quarter, compared to the first three months of the year.<\/p>\n

The UK economy contracted by 2.2 percent in the first quarter and, with a recession defined as two successive quarters of decline, the data on Wednesday will herald the country\u2019s first in a decade.<\/p>\n

Initial figures already released show economic activity plunged around 20 percent in April, before rebounding slightly in May thanks to the first easing of restrictions.<\/p>\n

The grim economic news comes despite unprecedented government interventions, including spending tens of billions of pounds on job support schemes in a bid to avoid mass layoffs.<\/p>\n

Meanwhile, the Bank of England has launched massive asset buybacks and cut interest rates to historic lows that are almost zero.<\/p>\n

If Britain\u2019s GDP drops by more than 20 percent, it will have posted the worst performance in the second quarter in Europe, ahead of Spain (-18.5 percent) and France (-13.8 percent).<\/p>

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Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

The country \u2014 which already has the highest death toll in Europe from the virus \u2014 appears to be paying a heavier price for locking down later than its continental neighbours earlier in the year.<\/p>\n

The British economy also relies more heavily on the hard-hit services sector than other European countries.<\/p>\n

\u2013 \u2018Won\u2019t be pretty\u2019 \u2013<\/p>\n

The recession is already wreaking havoc, with ONS data released Monday showing that around 730,000 workers have been removed from the payrolls of British companies since March.<\/p>\n

Announcements of job cuts have become a daily occurrence, with companies expected to pick up the pace of layoffs as the government\u2019s key employment support scheme ends in October.<\/p>\n

The unemployment rate is expected to soar in the months ahead, with millions set to turn to government benefit programmes.<\/p>\n

\u201cWhatever the numbers are, and they won\u2019t be pretty, the more important question is how quickly the UK economy can bounce back,\u201d said Michael Hewson, analyst at CMC Markets.<\/p>\n

\u201cWe have seen some progress on that,\u201d he added.<\/p>\n

Finance Minister Rishi Sunak has appeared cautious about the pace of the recovery, telling Sky News last week \u201cthere is hardship ahead for many people\u201d while noting there was \u201chope\u201d.<\/p>\n

Meanwhile, members of the Bank of England have been divided over how quickly Britain will return to economic normalcy.<\/p>\n

Recent indicators suggest a strong rebound in many industries, from retail sales \u2014 which saw a boost from businesses reopening in June \u2014 to other private-sector activity such as construction.<\/p>\n

In its forecast released last week, the BoE was less pessimistic about the fall in GDP for the whole of 2020, forecasting a drop of 9.5 percent.<\/p>\n

But at the same time, it said it expects a slower recovery in 2021 and warned that the economy would not return to its pre-pandemic level until 2022.<\/p>\n

(AFP)<\/p>\n","protected":false},"excerpt":{"rendered":"

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