London Daily

Focus on the big picture.
Saturday, Jun 27, 2026

Covid-19: Has the UK economy been hardest hit?

Covid-19: Has the UK economy been hardest hit?

The UK's GDP, which is the value of everything produced in the economy, was 9.9% down in 2020 compared with 2019.

There is no question that it has been a bad year for the UK economy, with severe restrictions imposed for a lot of the year as a result of coronavirus. It is also an economy reliant on consumer spending on things like hotels, restaurants and leisure activities, which have been badly hit by lockdowns.

But has the UK economy had a worse year than those in other advanced countries?

In an interview on Friday, Chancellor Rishi Sunak told BBC News: "We calculate GDP in a different way to pretty much everybody else."

He added that if you corrected for that difference: "What you find is that our performance is very much in line and comparable to other countries and, in fact, it may be on a margin better than places like Canada, Germany, Italy and Spain."

Shadow chancellor Anneliese Dodds told BBC News: "The UK has had the worst economic crisis of any major economy."


Spain, which is not in the G7 group of major advanced economies, registered a fall of 11%, so the UK economy certainly performed better than that.

The Office for National Statistics (ONS), which works out UK GDP, published a blog explaining the differences in methodology.

The tricky part is how you work out the output of public services such as healthcare or education.

If you want to know the output of a normal business, you just look at how much it has made from selling its goods or services.

That doesn't work as well with the public sector, so the ONS bases its figure on measures such as how many people have seen a GP, how many operations have taken place and the number of pupils receiving education.

Things like the closure of schools and the cancellation of non-urgent operations meant that the output of public services took a big hit in the pandemic.

Other countries tend to base their figures either on how much money has been spent on public services or how many hours have been worked by staff delivering them. As the amount of money spent has not fallen, that method would show less of a drop in their output.

That is also how the ONS works out GDP in nominal or cash terms. "Where the public services element is based on the money spent, the fall in UK GDP is broadly comparable to other G7 countries, and smaller than falls seen in Canada, Italy and Germany," it said.

"However, the 'real' estimates better reflect changes in the services being delivered."

The real estimate is the one that takes into account changes in prices, which the nominal one doesn't.

The ONS also looked at a measure of GDP excluding public services, which it said made little difference to the UK (which was factoring in a decline in public services already), but made Germany's figure worse by two percentage points. However, it added that: "In this approach the fall in UK GDP is still one of the largest in the G7."

Others have argued that while the distinction the chancellor mentioned may reduce the perceived fall in public sector output, it doesn't measure the drop in consumer spending or investment, both of which suffered from steep declines. "It is clear that the decline in GDP was significantly bigger in the UK than in Germany last year," said Andrew Kennington, from Capital Economics.

The UK economy fared badly last year. Adjusting for differences in methodology improves that performance, but it still leaves the UK towards the bottom of the league for economic performance.

Prof Diane Coyle, from University of Cambridge, told Reality Check: "This does show the limitations of GDP as a measure of economic wellbeing in any meaningful sense.

"It isn't a great framework for measuring any output outside the market, be that public services or environmental impacts."


Chancellor Rishi Sunak says the GDP slump is "comparable to other countries"


Newsletter

Related Articles

0:00
0:00
Close
London Ambulance Service Sees Record Emergency Demand as Heatwave Intensifies
British Chambers of Commerce Warns of Prolonged Weak Investment Climate Through 2027
Bank of England Holds Interest Rates as Inflation Risks Persist
UK Construction Sector Faces One Percent Contraction Amid Cost and Investment Pressures
Former DUP Leader Sir Jeffrey Donaldson Convicted of Sexual Offences
Church of England Appoints Dr Linsay Cunningham to Lead Faith and Public Life Division
UK Armed Forces Day Marked Nationwide With Events From Aberdeen to the Scilly Isles
Rising Tensions in Edinburgh Prompt Joint Warning From Scottish Local Government Leaders
UK Construction Sector Forecast to Contract One Percent in 2026 on Cost Pressures
UK Parliament Backs 87 Percent Emissions Cut as Government Deepens Electrification Drive
British Chambers of Commerce Forecast Weak UK Growth as Investment and Demand Slow
Bank of England Holds Interest Rates at 3.75 Percent Amid Energy and Inflation Uncertainty
London Ambulance Service Reports Record Surge in Life-Threatening Emergency Calls During Heatwave
UK Parliament Approves Legally Binding 87 Percent Emissions Cut Target by 2040
United Kingdom Records Third Consecutive Day of Record June Heat as Europe Faces Worsening Heatwave
Robert Jenrick Defends £5 Million Donation to Nigel Farage Amid Political Scrutiny
Plymouth Museum The Box Wins 2026 Art Fund Museum of the Year Award
UK Government Faces Backlash Over Plans to Use Former Military Sites for Asylum Accommodation
Labour Party Faces Pressure Over Cabinet Stability as Senior Figures Clash on Policy Direction
Heathrow Airport Forecasts Passenger Decline in 2026 as Costs and Climate Disruption Mount
UK Energy Regulator Approves Expansion of Long-Duration Storage to Boost Power System Resilience
Crown Estate Reports Third Consecutive Year of £1 Billion Profit as Debate Over Royal Finances Intensifies
Teenager Charged With Murder in Wales Following Death of 14-Year-Old Boy
Nottingham University Hospitals Maternity Failures Trigger Calls for Public Inquiry Into Patient Safety
EasyJet Rejects £4.9 Billion Takeover Offer From Castlelake but Keeps Door Open for Further Talks
Record Heatwave Triggers UK Transport and Infrastructure Strain as Heathrow Revises Passenger Forecast Downward
Ofgem Approves Sixteen Long-Duration Energy Storage Projects to Strengthen UK Grid Stability
Labour Government Faces Internal Tensions Over Cabinet Decisions and Net Zero Policy Direction
British Food and Drink Exports Fall to Decade Low Amid Trade Friction and US Tariffs
Great Britain Grid Operator Spends £10 Million to Stabilize Electricity Supply During Heatwave Demand Surge
UK Parliament Committee Calls for Urgent National Adaptation Strategy as Extreme Heat Strains Public Infrastructure
Record-Breaking Heatwave Pushes England’s National Health Service to Critical Incident Status as Hospitals Struggle With Surge in Emergencies
UK Government Launches Review of Voluntary National Insurance Contributions System
UK Planning Inspectorate Reports Key Infrastructure and Planning Milestones in Annual Review
UK Government Reviews Travel Expense Reimbursement Rates for Employers and Employees
Civil Nuclear Constabulary Launches National Digital Memorial for Officers Killed in Service
UK and US Expand Collaboration on Nuclear Fusion Research and Workforce Exchange
Environment Agency Secures £275,000 Enforcement Deal with Anglian Water Over Permit Breaches
Independent Inspector Flags Ongoing Failures in UK Home Office Border Case Management
UK Government Considers Zero VAT Rate on Land for Social Housing Development
Bank of England Reports Sharp Drop in Emissions and Warns on Climate-Driven Financial Risk
Consumer Confidence in the UK Falls at Fastest Quarterly Rate Since 2022
UK Borrowing Costs Rise Sharply on Gilt Markets Amid Fiscal and Political Concerns
UK Government Plans Legislation to Bring British Steel into Public Ownership
UK Government Secures £210 Million Nuclear Fuel Deal to Support Ukraine Energy Security
London Ambulance Service Reports Record Emergency Call Volume Amid Severe Heatwave
United Kingdom Faces Record June Heatwave as Temperatures Hit 36.7°C in Somerset
UK Financial Services Reform Debate Intensifies Over Ministerial Regulatory Powers
UK Energy Price Cap Rise Expected to Keep Inflation Above Target Through 2026
UK Biohacking and AI Wellness Trends Drive Surge in Personal Health Monitoring
×