London Daily

Focus on the big picture.
Tuesday, Jan 13, 2026

UK economy shrinks but might avoid double-dip recession

UK economy shrinks but might avoid double-dip recession

Britain’s economy shrank in November as it went into a new lockdown, but the decline was smaller than expected as businesses adjusted to social distancing and schools remained open, making a double-dip recession less likely.


The 2.6% monthly decline in Friday’s official data was the first since April but less than half the average contraction forecast in a Reuters poll of economists. The scale was also far smaller than April’s 18.8% collapse during Britain’s first lockdown.

“Overall, the growing immunity to lockdowns suggests that the economy is not quite as sick as we thought,” said Paul Dales, chief UK economist at Capital Economics.

The world’s sixth-biggest economy shrank more than its peers in the first half of 2020 and is now 8.5% smaller than it was in February, before the start of the pandemic.

A third, stricter lockdown that began this month is likely to cause Britain’s economy to contract in the first quarter of 2021, when many businesses are facing post-Brexit barriers to trade with the European Union.

“It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face,” finance minister Rishi Sunak said.

But Britain’s roll-out of vaccines - which has been faster than elsewhere in Europe - was a reason to be hopeful, he added.

Several economists warned that Britain remained at risk of a renewed recession, with the economy likely to shrink in both the final quarter of 2020 and the first three months of 2021.

But others thought a contraction might be avoided in the fourth quarter because November’s restrictions were lifted in December.

BoE Governor Andrew Bailey said this week that it was too soon to say if further stimulus would be needed after the central bank ramped up its bond-buying programme to almost 900 billion pounds ($1.23 trillion) in November.

Friday’s data showed Britain’s economy in November was 8.9% smaller than a year earlier, compared with 6.8% smaller in October. In April, when many businesses closed temporarily, output was a record 25% below its year-ago level.

November’s downturn was led by services, where output fell 3.4% from October as pubs, restaurants, non-essential shops and many other consumer services had to shut. Manufacturing grew by 0.7% and construction by 1.9%.

Part of the scale of the damage to Britain’s economy in 2020 reflects a decision by the ONS to take account of disruption to routine medical care and schooling caused by COVID-19, an approach which not all countries’ statistics agencies have taken. The ONS said this was less of a drag on GDP in November.

Newsletter

Related Articles

0:00
0:00
Close
Meghan Markle Could Return to the UK for the First Time in Nearly Four Years If Security Is Secured
Meghan Markle Likely to Return to UK Only if Harry Secures Official Security Cover
UAE Restricts Funding for Emiratis to Study in UK Amid Fears Over Muslim Brotherhood Influence
EU Seeks ‘Farage Clause’ in Brexit Reset Talks to Safeguard Long-Term Agreement Stability
Starmer’s Push to Rally Support for Action Against Elon Musk’s X Faces Setback as Canada Shuns Ban
UK Free School Meals Expansion Faces Political and Budgetary Delays
EU Seeks ‘Farage Clause’ in Brexit Reset Talks With Britain
Germany Hit by Major Airport Strikes Disrupting European Travel
Prince Harry Seeks King Charles’ Support to Open Invictus Games on UK Return
Washington Holds Back as Britain and France Signal Willingness to Deploy Troops in Postwar Ukraine
Elon Musk Accuses UK Government of Suppressing Free Speech as X Faces Potential Ban Over AI-Generated Content
Russia Deploys Hypersonic Missile in Strike on Ukraine
OpenAI and SoftBank Commit One Billion Dollars to Energy and Data Centre Supplier
UK Prime Minister Starmer Reaffirms Support for Danish Sovereignty Over Greenland Amid U.S. Pressure
UK Support Bolsters U.S. Seizure of Russian-Flagged Tanker Marinera in Atlantic Strike on Sanctions Evasion
The Claim That Maduro’s Capture and Trial Violate International Law Is Either Legally Illiterate—or Deliberately Deceptive
UK Data Watchdog Probes Elon Musk’s X Over AI-Generated Grok Images Amid Surge in Non-Consensual Outputs
Prince Harry to Return to UK for Court Hearing Without Plans to Meet King Charles III
UK Confirms Support for US Seizure of Russian-Flagged Oil Tanker in North Atlantic
Béla Tarr, Visionary Hungarian Filmmaker, Dies at Seventy After Long Illness
UK and France Pledge Military Hubs Across Ukraine in Post-Ceasefire Security Plan
Prince Harry Poised to Regain UK Security Cover, Clearing Way for Family Visits
UK Junk Food Advertising Ban Faces Major Loophole Allowing Brand-Only Promotions
Maduro’s Arrest Without The Hague Tests International Law—and Trump’s Willingness to Break It
German Intelligence Secretly Intercepted Obama’s Air Force One Communications
The U.S. State Department’s account in Persian: “President Trump is a man of action. If you didn’t know it until now, now you do—do not play games with President Trump.”
Fake Mainstream Media Double Standard: Elon Musk Versus Mamdani
HSBC Leads 2026 Mortgage Rate Cuts as UK Lending Costs Ease
US Joint Chiefs Chairman Outlines How Operation Absolute Resolve Was Carried Out in Venezuela
Starmer Welcomes End of Maduro Era While Stressing International Law and UK Non-Involvement
Korean Beauty Turns Viral Skincare Into a Global Export Engine
UK Confirms Non-Involvement in U.S. Military Action Against Venezuela
UK Terror Watchdog Calls for Australian-Style Social Media Ban to Protect Teenagers
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Europe’s Luxury Sanctions Punish Russian Consumers While a Sanctions-Circumvention Industry Thrives
Berkshire’s Buffett-to-Abel Transition Tests Whether a One-Man Trust Model Can Survive as a System
Fraud in European Central Bank: Lagarde’s Hidden Pay Premium Exposes a Transparency Crisis at the European Central Bank
Trump Announces U.S. Large-Scale Strike on Venezuela, Declares President Maduro and Wife Captured
Tesla Loses EV Crown to China’s BYD After Annual Deliveries Decline in 2025
UK Manufacturing Growth Reaches 15-Month Peak as Output and Orders Improve in December
Beijing Threatened to Scrap UK–China Trade Talks After British Minister’s Taiwan Visit
Newly Released Files Reveal Tony Blair Pressured Officials Over Iraq Death Case Involving UK Soldiers
Top Stocks and Themes to Watch in 2026 as Markets Enter New Year with Fresh Momentum
No UK Curfew Ordered as Deepfake TikTok Falsely Attributes Decree to Prime Minister Starmer
Europe’s Largest Defence Groups Set to Return Nearly Five Billion Dollars to Shareholders in Twenty Twenty-Five
Abu Dhabi ‘Capital of Capital’: How Abu Dhabi Rose as a Sovereign Wealth Power
Diamonds Are Powering a New Quantum Revolution
Trump Threatens Strikes Against Iran if Nuclear Programme Is Restarted
Apple Escalates Legal Fight by Appealing £1.5 Billion UK Ruling Over App Store Fees
×