The New data published earlier today by the Office for National Statistics (ONS) showed that the GDP declined by 9.9%in 2020, which marks the largest contraction on record.
The dip in GDP came after a historic recession at the start of 2020, caused by the spread of the corona virus in February and March. The virus brought large parts of the economy to a standstill for months from March onwards.
With a glimmer of hope, the economy began to rebound in the third quarter of last year but remains 7.8% smaller than it was at the end of 2019, according to the data released by the Office for National Statistics (ONS).
This slump wiped out seven years-worth of growth, taking the UK economy back to its 2013 size. Barely escaping shrinking at the end of 2020, the UK GDP grew by 1% in the fourth quarter of 2020 (which was slightly better than forecast.
A return to lockdown in November last year, followed by heavy restrictions on activity in December, meant many market analysts initially expected the UK GDP to decline again in the final quarter of 2020. But businesses have learned to adapt to COVID-19 restrictions and coped better than they had with the initial COVID shutdown.
Analysts are optimistic that activity can quickly rebound once restrictions start to ease. Andrew Bailey, the Governor of the Bank of England said last that the rollout of vaccines should help the economy “recover rapidly” in the second half of 2021.