United Kingdom Suffers Worst Annual Contraction Since Year 1709

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Tower Bridge, London, United Kingdom U.K.
Tower Bridge, London, United Kingdom U.K.

The United Kingdom economy shrank by 9.9% in 2020 — the U.K’s worst annual slump since the Great Frost of 1709. The economic contraction followed the Covid-19 pandemic and worsened with the discovery of the new corona-virus variant in November. 

In 2009, the United Kingdom suffered a similar slump because of the global financial crisis. However, this year’s contraction is as twice as that of 2009. In fact, it’s even worse than the 9.7% slump in 1921.

Small Strides Amid United Kingdom’s GOP Slump

According to a report by the Office for National Statistics, the United Kingdom’s gross domestic product grew by 1% following the country’s imposition of the nationwide lockdown measures.   

Meanwhile, the monthly GDP increased 1.2% in December compared to the preceding month. Regardless, levels have not increased enough to combat the lows of 6.3% in February 2020. Additionally, the fourth-quarter GDP stabilized at 6.6% below the level of the previous year.

The services sector saw a 1.7% jump in December, compared to a 3.1% contraction earlier in November. On the other hand, manufacturing marked its eighth consecutive month of growth. Nevertheless, manufacturing growth continues compared to May 2020.