UK economy shrinks 2.6% in November on virus curbs

LONDON – The British economy slumped 2.6% in November, official data showed today, hitting reverse on the back of government restrictions aimed at curbing the spread of the coronavirus.

Gross domestic product nosedived in November from upwardly-revised 0.6% growth in October, the Office for National Statistics said in a statement.

The figures meant the economy was 8.5% smaller compared with its pre-pandemic level in February, it added.

"Following six consecutive monthly increases... real gross domestic product (GDP) fell by 2.6% in November 2020. Restrictions were in place to varying degrees across all four nations of the UK during November," the ONS said in a statement.

England was placed in partial lockdown in November as the government raced to curb spiking Covid-19 infections, while there were also restrictions in Wales, Scotland and Northern Ireland.

Britain then imposed a strict lockdown earlier this month, similar to the first national coronavirus curbs that had been in place from March to June, as it sought to halt a variant Covid-19 strain that is more transmissible and has sparked surging infections.

"The economy took a hit from restrictions put in place to contain the pandemic during November, with pubs and hairdressers seeing the biggest impact," said Darren Morgan, ONS director for economic statistics.

"However, many businesses adjusted to the new working conditions during the pandemic, such as widespread use of click-and-collect as well as the move online.

"Manufacturing and construction generally continued to operate, while schools also stayed open, meaning the impact on the economy was significantly smaller in November than during the first lockdown."

He added: "Car manufacturing, bolstered by demand from abroad, housebuilding and infrastructure grew and are now all above their pre-pandemic levels."

November's downturn also came ahead of Britain's final divorce from the European Union at the end of December when it formally left the EU single market and customs union. – AFP, January 15, 2021