It’s been no secret that the UK growth figures for April would be a horror show. With the economy in full lockdown as a result of the Covid-19 pandemic it was inevitable that activity would take a hit of historic proportions.
All that was at issue was whether the news from the Office for National Statistics (ONS) would be bad, really bad, calamitous or so far off the scale that even the most hardcore pessimist had not envisaged it. In the end, it was merely calamitous.
It goes without saying the 20.4% contraction of the economy was the worst on record. The decline was three times as big as the contraction in March and 10 times as big as anything before Covid-19. The economy was 25% smaller in April than in February. Almost two decades of growth has been wiped out in two months.
The ONS has only been publishing monthly data since 1997. But even had there been data going back 100 years, it is hard to believe anything could have matched the first full month of Covid-19 restrictions.
The scale of the decline in activity should not really have been a surprise because pretty much everything in the private sector outside of food retailing was either closed or running at a fraction of its normal capacity. Planes were grounded, restaurants and hotels were shut. It was impossible to get a haircut. According to the ONS, the biggest contributions to the fall came from pubs, new car sales, education and health.
If there is one crumb of comfort from the figures it is that April will mark the bottom of the trough. The economy started to grow again in May as lockdown restrictions were gradually lifted. But the improvement will be marginal. Britain’s economy has fallen off a cliff. It will be a long climb back.