Dodds slams "Johnson’s jobs crisis" as United Kingdom officially enters recession

Andrew Cummings
August 13, 2020

Jonathan Athow, the deputy statistician for economic statistics at the ONS, said: "The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record". The blow is hitting hardest in countries where the pandemic has been the most severe and where there is heavy reliance on global trade, tourism, commodity exports, and external financing.

The ONS said the economy is still a long way off from recovering the record falls seen in March and April after tumbling into "the largest recession on record".

"I've said before that hard times were ahead, and today's figures confirm that hard times are here", Chancellor of the Exchequer Rishi Sunak said.

Productivity plunged at the fastest pace on record during lockdown as millions of people were placed on furlough and the economy shrank by a fifth.

The data also showed the world's sixth-largest economy entered a recession, its first since 2009, as it shrank for a second quarter in a row.

Fox News' Greg Palkot reports on the United Kingdom government encouraging people to go back to work if they can not work remotely.

Sunak, whose official title is Chancellor of the Exchequer, plans to end in October the government's furlough scheme that is paying up to 80 percent of wages for almost 10 million workers.

Monthly GDP did bounce back in June, growing by 8.7% as Government restrictions on movement started to ease. Prime Minister Boris Johnson, who was hospitalized with the virus, has said he aims for a "return to normality" by Christmas.

The negative consequences of the nationwide lockdown on the UK's economy can't be overemphasised either, according to the professor: "This has had an adverse impact on business and consumer confidence leading increased unemployment and applications to access universal credit despite the government's financial support via furlough scheme", he says.

To help the economy recover, the Bank of England (BoE) is pumping out hundreds of billions of pounds in cash stimulus and has slashed its main interest rate to a record-low 0.1 percent.

"The prospect of a swift "V-shaped" recovery remains remote", he said.

However, the Office for National Statistics said that over the first six months of 2020, GDP fell by 22.1 per cent, slightly less than Spain's 22.7 per cent but more than double the 10.6 per cent fall in U.S.

The BoE expects the unemployment rate to shoot to around 7.5 percent by the end of the year from 3.9 percent now.

The damage in the second quarter was widespread, with the construction industry alone seeing a 35% contraction.

According to the NSO study, between last April and June, the United Kingdom had 32,920,000 workers over the age of 16, 113,000 more than a year ago, but 220,000 fewer than in the previous quarter.

ONS data released Monday showed that around 730,000 workers have been removed from the payrolls of British companies since March.

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