UK economy fights back: Growing by 16.9% and 1.3% in last 6 months of 2020 – ONS - Daily Express

Office for National Statistics data reveals the economy grew by 16.9 percent and 1.3 percent in the third and fourth quarters of 2020. However, gross domestic product (GDP) shrank by more than expected in the second quarter during the first coronavirus lockdown, plunging by 19.5 percent. 

Overall GDP plummeted by 9.8 percent overall in 2020, against an initial recording of 9.9 percent last year. 

This is the largest contraction of the UK economy in more than 300 years since 1709, according to a GDP reconstruction by the Bank of England.

The ONS however stressed GDP estimates are "subject to more uncertainty than usual" and likely to have larger-than-normal revisions due to the challenges of collecting data in the pandemic.

Meanwhile, UK output expanded 1.3 per cent in the final quarter of 2020 compared with the previous three months, an increase revision from 1 per cent.

Brits also saved more as the household saving ratio, the average percentage of disposable income that is saved, increased to 16.1 per cent in the final quarter of last year. 

This figure is an increase from 14.3 percent in the third quarter of 2020 and one of the highest ratios since 1963 when records first began. 

Data also revealed Britain’s current account deficit widened to 26.3 billion pounds in the fourth quarter, almost double the shortfall in the third quarter, as firms rushed to import goods before the January 1st start to the country’s less open trade relationship with the European Union.

But the deficit is a long-standing concern for investors because it leaves Britain reliant on foreign inflows of cash. 

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Jonathan Athow, deputy national statistician at the ONS, said: "Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year.

"However, these new estimates paint the same overall picture as before, with historically large falls in GDP in the spring, followed by a recovery in the summer and autumn."

Recent monthly figures from the ONS also show that the third English lockdown sent GDP plunging 2.9% in January, though this was better than feared by experts.

In separate figures also released this morning, the ONS said the UK current account deficit - the difference between the value of the goods and services the UK imports and the goods and services it exports had widened to £26.3 billion in the fourth quarter of 2020.

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This is equivalent to 4.8 percent of Britain's GDP and is almost twice the level seen in the previous three months as firms stockpiled imports ahead of the December 31 Brexit deadline.

The UK economy suffered among the largest contractions of all the countries in the Organisation for Economic Co-operation and Development (OECD), with only Spain and Argentina seeing steeper falls.

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2021-03-31 06:26:00Z
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