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Thursday, Oct 01, 2026

UK to plunge into recession tomorrow as coronavirus sparks record slump

UK to plunge into recession tomorrow as coronavirus sparks record slump

The pandemic send the economy plummeting by 21% between April and June.

Britain will officially be declared in a recession tomorrow after coronavirus sent the economy plunging by 21% between April and June.

The record drop is the worst in western Europe and is expected to be confirmed by the Office for National Statistics (ONS) after a 2.2% fall in the first three months of 2020.

A recession is defined as two successive quarters of decline in gross domestic product (GDP) – a measure of the size of the economy. Such a slump has not been seen in the UK since 2008 and 2009 during the global financial crisis.

It comes after ONS data showed around 730,000 UK workers have been removed from the payrolls of British companies since the coronavirus lockdown began in March, demonstrating the pandemic’s stranglehold on the economy.

Employment also dropped by the largest amount in a quarter since 2009 between May and June. But despite the record-breaking GDP slump expected for the second quarter, experts will be watching the monthly figure for June amid predictions it will bounce back by 8% after lockdown restrictions were eased further.

This follows a far lower than expected 1.8% rebound month-on-month in May. Last week the Bank of England said that while it expects the downturn to be less severe than first feared, the UK could take longer to rebound than previously predicted.



Debenhams which has announced 2,500 job losses, is among many businesses to suffer a massive blow this year (Picture: Getty Images)


It forecasted GDP to shrink by 9.5% this year, having warned in May over a 14% slump in 2020.

However, it dashed hopes of a V-shaped recovery, saying the economy is not expected to jump back to pre-virus levels until the end of 2021.

Philip Shaw at Investec Bank said: ‘We are forecasting a monthly increase of 8.1% as more of the economy, such as “non-essential” retailing, opened up in mid-June.

‘July’s figures next month should contribute strongly to a material rebound in the third quarter, but the test will come in the autumn when there are no further “lockdown releases” to boost the economy, some restrictions (perhaps just local) are imposed and programmes such as the furlough scheme are wound up.’

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