Rishi Sunak sees 'signs of resilience' as UK economy suffers biggest drop since 1709

UK chancellor of the wxchequer Rishi Sunak on Friday (12) pointed to signs of resilience and indicated further support measures in his Budget statement next month as latest statistics showed the British economy suffered its biggest decline in more than 300 years in 2020.

As most businesses, shops and restaurants continue to struggle through the coronavirus pandemic lockdown, the UK Office for National Statistics (ONS) found that the economy shrank 9.9 per cent last year, more than twice the figure for 2009 at the height of the global financial crisis.

The dire figures are the worst since 1709, when a cold spell known as the 'Great Frost' devastated what was then a largely agricultural economy in Britain.

“While there are some positive signs of the economy's resilience over the winter, we know that the current lockdown continues to have a significant impact on many people and businesses,” said Sunak, in response to the figures.

“Today's figures show that the economy has experienced a serious shock as a result of the pandemic, which has been felt by countries around the world,” said the senior cabinet minister, who promised new plans to protect jobs and bolster the economy when he delivers his Budget statement in the House of Commons on March 3.

The ONS figures showed a fightback from the record quarterly slump between April and June 2020, the second quarter, when GDP nosedived by 20 per cent as a consequence of the initial lockdown.

They also confirmed the prospect of a so-called double-dip recession was averted at the end of the year amid renewed lockdown conditions, with a first estimate for the October-December quarter showing growth of 1 per cent -- a better than expected performance.

"Loosening of restrictions in many parts of the UK saw elements of the economy recover some lost ground in December, with hospitality, car sales and hairdressers all seeing growth,” said Jonathan Athow, ONS deputy national statistician for economic statistics.

“An increase in COVID-19 testing and tracing also boosted output. The economy continued to grow in the fourth quarter as a whole, despite the additional restrictions in November. However, GDP for the year fell by nearly 10 per cent, more than twice as much as the previous largest annual fall on record,” he said.

According to Bank of England historical data, it marked the worst performance for the economy since the ''Great Frost'' hibernation of 1709 when a horrifically cold European winter, followed by widespread floods, crippled activity.