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British economy shrinks by 20.4% in April

12 Jun 2020 03:01 PM

The UK economy contracted during April, with the largest monthly drop in GDP in the country's history, according to the Office for National Statistics.

GDP decreased by 20.4% compared to the previous month, a sharp contraction and beyond expectations of 18.4%. These figures represent a decrease of 24.5% from April 2019, with the lockdown in response to the Coronavirus pandemic severely hampered economic activity.

During the three months to the end of April, the economy contracted by 10.4% compared to the previous three-month period.

Britain began its lockdown on March 23 in an attempt to reduce the spread of the coronavirus pandemic, but the country had counted 292,860 confirmed infections as of Friday morning. Some measures began to ease in May, but the vast majority of the UK economy was stalled throughout April.

Britain remains stuck in trade talks with the European Union, and business groups have warned of the dangers of a no-deal Brexit scenario, as it is feared that the Corona pandemic could spoil the talks this year.

The Organization for Economic Co-operation and Development (OECD) warned on Wednesday that the UK was likely to be the major economy hit hardest, as it expected the UK's GDP to drop by 11.5% in 2020, slightly worse than the expected recession for Italy and France. The British economy could be even harder hit (a potential fall of 14%) If there is a second wave of infections.

Rating agency Moody's also warned in a report on Wednesday that a no-deal Brexit would seriously harm the UK's recovery from its deepest recession in nearly a century.

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