UK economy shrunk twice as much as any other G7 nation’s during coronavirus pandemic, report shows

Across the 36 OECD nations, GDP fell by 4.3 per cent, leaving the UK lagging behind as an outlier

Ben Chapman
Thursday 19 November 2020 16:20 GMT
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<p>Survey results published on Thursday found that around one in seven companies in the UK worry that they might not survive the next three months</p>

Survey results published on Thursday found that around one in seven companies in the UK worry that they might not survive the next three months

The UK economy contracted more than twice as much as that of any other G7 nation in the first nine months of the year, a report has confirmed.

Despite a partial recovery between July and September as shops, bars and restaurants reopened, UK gross domestic product (GDP) in the third quarter of this year remained 9.7 per cent below its level at the end of 2019.

The next largest decline among the group of seven wealthy nations was Canada at 4.7 per cent, data collated by the Organisation for Economic Development (OECD) showed. The US endured the smallest contraction at 3.5 per cent.

Across the 36 OECD nations, GDP fell by 4.3 per cent, leaving the UK lagging behind as an outlier.

Some economists have questioned how comparable the data are because different countries account for certain activity – particularly public sector services – in different ways.

This has been exaggerated during the pandemic because schools have been closed and a substantial amount of healthcare, such as check-ups and cancer screening, has been postponed.  

Nonetheless, the figures – which do not reflect the impact of new lockdown measures now in place – will concern Rishi Sunak as he prepares to announce a spending review next week.  

Survey results published on Thursday found that around one in seven (14 per cent) companies in the UK worry that they might not survive the next three months.

The Office for National Statistics said that 13 per cent of businesses had paused trading and did not intend to restart within the next two weeks.

Firms were polled between 2 November and 15 November, meaning that further closures could have taken place under restrictions introduced in England on 5 November

Only 63 per cent of accommodation and food service businesses were still trading.  

A third of companies in the sector said they had low or no confidence that they could survive for three months.

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