U.K economy slumped by 9.9% in 2020, the worst contraction in more than 300 years, according to the Office for National Statistics press release. The economy avoided slipping into recession at the end of last year as GDP grew 1% between October and December.
- In December, Britain’s economy grew by 1.2%, up from a 2.3% slump in November.
- Despite the U.K economy looking to be on course for a recovery in 2021, the effects of the third COVID-19 lockdown is likely to weigh down on GDP early in the year.
- The Bank of England forecasts that the economy will shrink by 4% in the first three months of 2021 due to the new lockdowns and Brexit disruptions.
- BOE projects it will take until early 2022 before the economy gets to the pre-COVID size if vaccinations continue smoothly.
- BOE’s chief economist Andy Haldane expects the economy to hit double digits over the coming year.
- Britain’s economic slump in 2020 is steeper than almost any other big economy, although Spain contracted by 11%.
U.K stocks are currently gaining as the pound loses. FTSE 100 is up 0.086%, GBPUSD is down 0.06%.