UK GDP fell more than forecast in the first quarter

According to the report from Office for National Statistics, UK gross domestic product (GDP) in volume terms fell by 2.2% in Quarter 1 (Jan to Mar) 2020, revised downwards by 0.2 percentage points from the first quarterly estimate; this is now the joint largest fall in UK GDP since Quarter 3 (July to Sept) 1979. Economists had expected a 2.0% decrease.

When compared with the same quarter a year ago, UK GDP decreased by 1.7% in Quarter 1 2020, a downward revision of 0.1 percentage points from the previous estimate. Economists had expected a 1.6% decrease.

This release captures the first direct effects of the coronavirus (COVID-19) pandemic, and the government measures taken to reduce transmission of the virus.

The services, production and construction sectors provided a negative contribution to growth in the output approach to GDP in Quarter 1 2020; with services output falling by a record 2.3% in the latest quarter.

Household consumption declined by 2.9% in Quarter 1 2020, revised downwards by 1.2 percentage points from the first quarterly estimate; this is now the largest decline in household consumption since Quarter 3 (July to Sept) 1979.

UK GDP increased by 1.5% between 2018 and 2019, revised upwards by 0.1 percentage points from the previous estimate.

The households saving ratio increased to 8.6% in Quarter 1 2020, compared with 6.6% in Quarter 4 (Oct to Dec) 2019.