Are we on track for a double-dip recession? Britain’s economy shrank by almost 3.5% in November lockdown, official figures are forecast to show
Britain’s economy shrank by more than 3 per cent in the November lockdown, figures are expected to show this week.
On average, economists expect GDP to have fallen 3.4 per cent – although some experts think the decline was much steeper.
The economy had grown for six consecutive months, with GDP rising 0.4 per cent in October, before the Government ordered bars, restaurants and non-essential shops to close again in November.
Shrinking feeling: On average, economists expect GDP to have fallen 3.4 per cent – although some experts think the decline was much steeper
The GDP figures published on Friday will be the first indication of how the latest lockdown could affect the economy.
Chancellor Rishi Sunak has announced £4.6billion in grants to help businesses shuttered by the new restrictions. Each will get a one-off payment of up to £9,000. Sunak is also reviewing whether to extend the furlough scheme again.
Thomas Pugh, UK economist at Capital Economics, said his analysis showed GDP had fallen by as much as 8 per cent in November.
He said the industrial and construction sectors were likely to have grown by 0.6 per cent and 0.5 per cent, respectively, as they remained open during the November lockdown.
But he warned that output from the services sector – which includes pubs and restaurants – was likely to have declined by as much as 10.2 per cent.
‘The big unknown is how much of a hit to the economy the latest lockdowns will have,’ he said. ‘There is significant uncertainty around this given people and firms have now partly adapted to living under Covid-19 restrictions.’