London Daily

Focus on the big picture.
Friday, Nov 14, 2025

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
UK Upholds Firm Rules on Stablecoins to Shield Financial System
Brussels Divided as UK-EU Reset Stalls Over Budget Access
Prince Harry’s Remembrance Day Essay Expresses Strong Regret at Leaving Britain
UK Unemployment Hits 5% as Wage Growth Slows, Paving Way for Bank of England Rate Cut
Starmer Warns of Resurgent Racism in UK Politics as He Vows Child-Poverty Reforms
UK Grocery Inflation Slows to 4.7% as Supermarkets Launch Pre-Christmas Promotions
UK Government Backs the BBC amid Editing Scandal and Trump Threat of Legal Action
UK Assessment Mis-Estimated Fallout From Palestine Action Ban, Records Reveal
UK Halts Intelligence Sharing with US Amid Lethal Boat-Strike Concerns
King Charles III Leads Britain in Remembrance Sunday Tribute to War Dead
UK Retail Sales Growth Slows as Households Hold Back Ahead of Black Friday and Budget
Shell Pulls Out of Two UK Floating Wind Projects Amid Renewables Retreat
Viagogo Hit With £15 Million Tax Bill After HMRC Transfer-Pricing Inquiry
Jaguar Land Rover Cyberattack Pinches UK GDP, Bank of England Says
UK and Germany Sound Alarm on Russian-Satellite Threat to Critical Infrastructure
Former Prince Andrew Faces U.S. Congressional Request for Testimony Amid Brexit of Royal Title
BBC Director-General Tim Davie and News CEO Deborah Turness Resign Amid Editing Controversy
Tom Cruise Arrives by Helicopter at UK Scientology Fundraiser Amid Local Protests
Prince Andrew and Sarah Ferguson Face Fresh UK Probes Amid Royal Fallout
Mothers Link Teen Suicides to AI Chatbots in Growing Legal Battle
UK Government to Mirror Denmark’s Tough Immigration Framework in Major Policy Shift
UK Government Turns to Denmark-Style Immigration Reforms to Overhaul Border Rules
UK Chancellor Warned Against Cutting Insulation Funding as Budget Looms
UK Tenant Complaints Hit Record Levels as Rental Sector Faces Mounting Pressure
Apple to Pay Google About One Billion Dollars Annually for Gemini AI to Power Next-Generation Siri
UK Signals Major Shift as Nuclear Arms Race Looms
BBC’s « Celebrity Traitors UK » Finale Breaks Records with 11.1 Million Viewers
UK Spy Case Collapse Highlights Implications for UK-Taiwan Strategic Alignment
On the Road to the Oscars? Meghan Markle to Star in a New Film
A Vote Worth a Trillion Dollars: Elon Musk’s Defining Day
AI Researchers Claim Human-Level General Intelligence Is Already Here
President Donald Trump Challenges Nigeria with Military Options Over Alleged Christian Killings
Nancy Pelosi Finally Announces She Will Not Seek Re-Election, Signalling End of Long Congressional Career
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
ITV Warns of Nine-Per-Cent Drop in Q4 Advertising Revenue Amid Budget Uncertainty
National Grid Posts Slightly Stronger-Than-Expected Half-Year Profit as Regulatory Investments Drive Growth
UK Business Lobby Urges Reeves to Break Tax Pledges and Build Fiscal Headroom
UK to Launch Consultation on Stablecoin Regulation on November 10
UK Savers Rush to Withdraw Pension Cash Ahead of Budget Amid Tax-Change Fears
Massive Spoilers Emerge from MAFS UK 2025: Couple Swaps, Dating App Leaks and Reunion Bombshells
Kurdish-led Crime Network Operates UK Mini-Marts to Exploit Migrants and Sell Illicit Goods
UK Income Tax Hike Could Trigger £1 Billion Cut to Scotland’s Budget, Warns Finance Secretary
Tommy Robinson Acquitted of Terror-related Charge After Phone PIN Dispute
Boris Johnson Condemns Western Support for Hamas at Jewish Community Conference
HII Welcomes UK’s Westley Group to Strengthen AUKUS Submarine Supply Chain
Tragedy in Serbia: Coach Mladen Žižović Collapses During Match and Dies at 44
Diplo Says He Dated Katy Perry — and Justin Trudeau
Dick Cheney, Former U.S. Vice President, Dies at 84
Trump Calls Title Removal of Andrew ‘Tragic Situation’ Amid Royal Fallout
UK Bonds Rally as Chancellor Reeves Briefs Markets Ahead of November Budget
×