It was announced this week that the UK has entered a recession for the first time in 11 years with the economy shrinking 20.4%.
The lockdown period caused by the coronavirus pandemic saw a plunge in spending as businesses were forced to close. The economy is said to be experiencing the biggest fall since records began in 1955. Whilst shops and restaurants saw major falls in profit, factory and construction output also fell.
Chancellor Rishi Sunak has stated that the government is ‘grappling with something that is unprecedented‘. Job figures show that 220,000 people lost work between the months of April and June when the lockdown measures were at their strictest.
It is reported that the service sector, which powers a very large part of the economy, has suffered the greatest decline.
There are small signs of growth with the Office for National Statistics (ONS) reporting that the economy started to bounce back as restrictions were eased. In June the economy grew by 8.7% in comparison to a 1.8% growth in May. However, spending is still far below that of the pre-Coronavirus levels.