UK GDP fell less than forecast in the second quarter

According to the report from Office for National Statistics, UK gross domestic product (GDP) is estimated to have fallen by a record 20.4% in Quarter 2 (Apr to June) 2020, marking the second consecutive quarterly decline after it fell by 2.2% in Quarter 1 (Jan to Mar) 2020. Economists had expected a 20.5% decrease. When compared with Quarter 4 (Oct to Dec) 2019, UK GDP decreased by 22.1% in Quarter 2 2020.

Despite the weakness in Quarter 2 2020, there was some pick up in June. Monthly GDP grew by 8.7% in June 2020 as lockdown measures eased, following upwardly revised growth of 2.4% in May and a record fall of 20.0% in April 2020. In the two months since its April 2020 low, the UK economy has grown by a total of 11.3%. However, it still remains 17.2% below levels seen in February 2020, before the full impact of the coronavirus. 

There have been record quarterly falls in services, production and construction output in Quarter 2, which have been particularly prevalent in those industries that have been most exposed to government restrictions.

Private consumption accounted for more than 70% of the fall in the expenditure measure of GDP in Quarter 2 2020, falling by 23.1%; there were also notable falls in gross capital formation and government consumption.

Commenting on today’s GDP and productivity figures for June and the second quarter, ONS Deputy National Statistical for Economic Statistics Jonathan Athow said: “The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record. The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover. Despite this, GDP in June still remains a sixth below its level in February, before the virus struck. Overall, productivity saw its largest fall in the second quarter since the three-day week. Hospitality was worst hit, with productivity in that industry falling by three quarters in recent months.”