London Daily

Focus on the big picture.
Saturday, Sep 05, 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
UK Parliament Raises Concerns Over Funding Structure of £400 Million Tropical Forest Initiative
Andy Burnham Launches Number 10 North as Part of UK Devolution Push
UK Reaffirms Falkland Islands Sovereignty Amid Renewed Regional Pressure
Andy Burnham to Abstain From Assisted Dying Vote as Ministers Are Told to Remain Neutral
Kemi Badenoch Sacks Shadow Chancellor Mel Stride in Conservative Economic Strategy Shake-Up
UK Government Drops Early Prisoner Release Plan in Favor of Deportations and Wider Prison Reform
UK Farmers Warn Drought-Hit Harvests Could Push Grocery Prices Higher
UK Economy Faces Persistent Stagflation Risks Ahead of October Budget
Masked Protesters Block Port of Dover Roads, Disrupting Cross-Channel Traffic
Reform UK Suspends Senior Officials After Undercover Investigation Into Foreign Donation Plans
UK Urges Households to Keep Emergency Supplies Amid Severe El Niño Warning
Prime Minister Andy Burnham Sets Out Regional Industry and Prison Reform Agenda
Siemens Energy Wins Rolls-Royce Small Modular Reactor Manufacturing Contract
UK Mortgage Costs Rise as Gilt Yields and Swap Rates Climb
Bank of England’s Huw Pill Calls for Prompt Rate Rise as Inflation Risks Persist
National Audit Office Warns UK Is Unprepared for Major Food Supply Disruptions
British Army Suspends Some Training Exercises as Budget Pressures Intensify
HMS Queen Elizabeth Deploys as NATO Allied Response Force Command Ship
Reform UK Suspends Two Senior Officials Over Alleged Foreign Donation Scheme
UK Reasserts Falkland Islands Sovereignty After Argentina Threatens Sanctions
Scottish Tech Company PureLifi Enters Administration With More Than 40 Job Losses
Scottish Government Names Alyn Smith Innovation and Education Minister
Green Party Co-Leader Zack Polanski to Contest By-Election for Keir Starmer’s Former Seat
Palestine Action Activists Appeal Terrorism-Related Prison Sentences
PwC Report Highlights Persistent Regional Spending-Power Divide Across Britain
UK Names Hundreds of Employers for Minimum Wage Violations
UK Commits £400 Million to International Tropical Forest Fund
UK Extends £2 Bus Fare Cap Across England Through 2027
UK Warns Travellers as US-Iran Tensions Disrupt Middle East Security and Shipping
Andy Burnham Faces Kemi Badenoch in First Prime Minister’s Questions
Kemi Badenoch Names Andrew Griffith Shadow Chancellor in Conservative Reshuffle
UK Treasury and Markets Focus on Fiscal Headroom Ahead of Autumn Budget
UK Government Reverses Early Release Plans for Serious Violent and Sexual Offences
UK and France Review Border Cooperation After 48,000 Small-Boat Crossings Prevented
UK Growth Outlook Weakens as Inflation and Energy Costs Rise
Breeding Tropical Mosquitoes Discovered in East London
Sadiq Khan Agrees to Search of Digital Communications in Palantir Lawsuit
Scottish Protesters Call for Moratorium on AI Data Centre Expansion
Uber Drivers Bring London Class Action Over Algorithmic Management
Reform UK Accepts £4 Million Donation From Cryptocurrency Billionaire Pardoned by Trump
Justice Secretary Tightens Early Release Scheme to Exclude Manslaughter Offenders
Kemi Badenoch Reshuffles Conservative Team as Reform UK Pressure Grows
British Mortgage Rates Rise as Global Bond Sell-Off Pushes Up Borrowing Costs
UK Records Hottest Summer on Record in 2026
UK Government Urges Households to Stock Essential Supplies Ahead of Severe El Niño Risk
UK Prepares Targeted Sanctions Over Israeli Settlements in West Bank
Reform UK Faces Electoral and Police Scrutiny Over Foreign Donation Allegations
UK and France Expand Channel Migration Cooperation as Trade Tensions Surface
UK Marks Merchant Navy Day With Tribute to Civilian Seafarers
Burnham Pays Tribute to Two Police Officers Killed on Duty in Northern England
×