The UK economy experienced a record slump in 2020 as the economy shrank by 9.9% according to the Office for National Statistics (ONS). This data follows an unprecedented and challenging year for businesses across the UK, with many closing as a result of the Coronavirus pandemic.
Despite the shrinkage, the economy is expected to avoid a double-dip recession due to growth at the end of last year. The economy grew by 1.2% in December after some restrictions eased, following a 2.3% decline in November.
A double-dip recession refers to a recession which is followed by a short-lived recovery before another recession. A recession is usually defined by two consecutive quarters in which the economy declines. As the pandemic has caused businesses across the nation to close or cease trade, there has been a huge decrease in spending across various industries.
Despite the decline, the manufacturing sector recorded its eighth consecutive monthly growth, however this was its weakest since May 2020. Retail grew by 0.3% during December 2020, with output 2.7% above February 2020 levels. This is a result of a boom in online shopping which followed the closure of major high street stores during lockdown. Sectors such as accommodation and the food & beverages services have suffered, with output in the latest month 55.6% weaker than the level in February 2020.
Although it has been a challenging time for business across the UK, there are signs of recovery. With the end of a lockdown possibly in sight, it could soon be time for businesses to reopen and the economy to continue its recovery.
The Prime Minister is set to make an announcement on Monday 22 February, where he plans to outline his road map out of the lockdown that has been in place in England since 5 January.
You can find out further information regarding the data from the Office for National Statistics here.