The UK economy shrank by 2% in the first quarter of 2020 as the coronavirus crisis saw activity contract at a record pace in March, official figures have shown.
The Office for National Statistics (ONS) said activity plunged 5.8% in March, sending first-quarter gross domestic product (GDP) tumbling in the biggest fall since the end of 2008 at the height of the financial crisis.
The latest figures show the first direct effect of the Covid-19 pandemic on the UK economy after the country was placed in lockdown to control the spread of the virus.
But with the lockdown only coming into place on March 23, the second quarter will show the full hit on the economy after the UK ground to a standstill.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “With the arrival of the pandemic, nearly every aspect of the economy was hit in March, dragging growth to a record monthly fall.
“Services and construction saw record declines on the month with education, car sales and restaurants all falling substantially.”
He added: “The pandemic also hit trade globally, with UK imports and exports falling over the last couple of months, including a notable drop in imports from China.”
Economists warned that this fall was just the tip of the iceberg.
Ulas Akincilar, from online trading platform, INFINOX , said: “A 2% decline over three months caused gnashing of teeth when it last happened in the dark days of 2008 – but right now it feels almost like a win.
“The reality is Britain’s economic pain is just beginning, and this anachronistic data only captures the first twinges.”
But others warned the collapse in GDP isn’t a reason to end lockdown early.
Fran Boait, executive director of Positive Money, said: “As GDP continues to fall policymakers will be increasingly tempted to accelerate the easing of emergency public health measures in order to get the economy growing again.
There is a clear tension between this dash for growth and public health, as illustrated by the government’s eagerness to get workers back to workplaces regardless of whether it is safe.
“The evidence shows that the vast majority of the public think we should worry more about people’s health and wellbeing than GDP growth during this crisis. The government should not pay too much attention to today’s statistics and instead put public health ahead of private wealth.”