Rishi Sunak warns of impending employment disaster as the UK economy OFFICIALLY slips into recession after falling a shocking 20.4% at the height of the coronavirus outbreak – wiping out 17 years of GDP growth
- Britain has officially entered recession after the second quarter of contraction
- GDP fell 20.4 percent in the three months to June at the height of the Covid crisis
- The economy recovered in June with growth of 8.7 percent
Rishi Sunak warned of an impending employment disaster today when it was revealed that the UK economy had plummeted more than a fifth at the height of the coronavirus outbreak.
The numbers show that UK plc is down a shocking 20.4 percent in the three months to June. This is the largest decline in modern history, with record declines in construction, services, and production.
The news means the country is officially in a recession defined by two consecutive negative quarters.
The economy contracted 2.2 percent in the first three months of the year and is now smaller than it has been since 2003.
However, there was a glimmer of hope when the GDP figure fell 8.7 percent for a month in June as lockdown restrictions eased.
The Chancellor said the fall showed that "tough times are here" and warned that many more jobs would be lost.
"I said before that tough times are ahead and today's numbers confirm that tough times are ahead," he said.
“Hundreds of thousands of people have already lost their jobs, and unfortunately there will be many more in the coming months.
"But while decisions are difficult to make, we will get through this, and I can assure people that no one will be left without hope or opportunity."
Boris Johnson has already warned the country is about to take a "bumpy" ride, but insisted the government is ready to make "colossal" investments in the future.
Official figures showed UK plc was down 20.4 percent in the three months to June
The National Statistics Office said the UK was harder hit than many other economies in the first half of the year
Construction was the worst hit economic area in the second quarter of the year
Jonathan Athow, spokesman for the bureau of national statistics, said: “The recession triggered by the coronavirus pandemic has resulted in the largest decline in quarterly GDP in history.
& # 39; The economy recovered in June as stores reopened, factories started production and housing construction continued to recover. Even so, June GDP is still a sixth below its February level before the virus hit.
& # 39; Overall, productivity in the second quarter had declined the most since the three-day week. The hospitality industry was hardest hit, as productivity in the industry has fallen by three quarters in recent months. & # 39;
The decline is roughly in line with the Bank of England predictions.
The dire picture came after figures yesterday showed that the number of employees in companies had fallen by 730,000 since the lockdown – with employment seeing its largest decline in a decade.
In the three months to June, the number of employees fell by 220,000 – the largest quarterly slump since 2009. The total number of hours worked fell by a fifth in the quarter to its lowest level since 1994.
Meanwhile, the number of employees fell another 114,000 in July when the number of applicants – which includes some workers – rose again to 2.7 million.
The Debenhams retail chain has underlined the misery and announced that it will cut 2,500 rolls.
However, analysts warned that the gritty news was the tip of the iceberg as the massive impact of the lockdown has so far been masked by the government's massive support programs.
Around 9.6 million jobs were created and the Treasury Department paid out a subsidy of £ 33.8 billion.
Many people seem to have chosen to remain economically "inactive" rather than looking for work – which means that they stay outside the top unemployment figures.
The Bank of England's latest forecast is that the economy will shrink 9.5 percent this year, the worst downturn in a century, with unemployment rising by a million.
The GDP numbers show the UK has entered a technical recession – with two consecutive quarters of contraction. The Bank of England predicts that the downturn will be the worst in a hundred years (graph in picture).
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