# UK economy shrank record 11% in 2020, worst since 1709
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-22
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Britain's GDP Fell by 11% in 2020 - Largest Drop Since
Meta Description: Latest official figures show Britain faced its biggest economic decline in 2020, the largest since 1709. Stay updated on UK's economic performance.
URL: https://financedigest.com/uk-economy-shrank-record-11-in-2020-worst-since-1709html

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LONDON (Reuters) – Britain recorded its biggest fall in output in more than 300 years in 2020 when it faced the brunt of the COVID-19 pandemic, as well as a larger decline than any other major economy, updated official figures showed on Monday.

Gross domestic product fell by 11.0% in 2020, the Office for National Statistics said. This was a bigger drop than any of the ONS’s previous estimates and the largest fall since 1709, according to historical data hosted by the Bank of England.

British statisticians [regularly update GDP estimates as more data](https://www.financedigest.com/who-urges-china-to-share-specific-data-regularly-on-covid-situation.html "WHO urges China to share specific data regularly on COVID situation") becomes available.

The ONS’s initial estimates had already [suggested that in 2020 Britain suffered its biggest fall](https://www.financedigest.com/stocks-yields-fall-data-suggests-u-s-economy-cooling.html "Stocks, yields fall; data suggests U.S. economy cooling") in output since the “Great Frost” of 1709. But more recently the ONS had revised down the scale of the fall to 9.3%, the [largest since just after World](https://www.financedigest.com/at-chinas-largest-trade-fair-exporters-worry-about-world-economy.html "At China’s largest trade fair, exporters worry about world economy") War One.

Even before the latest revisions Britain’s [economic slump](https://www.financedigest.com/oil-slumps-on-economic-data-stronger-u-s-dollar.html "Oil slumps on economic data, stronger U.S. dollar") was the largest in the Group of Seven, and the latest downward revision makes it greater than Spain’s, which recorded a 10.8% fall in output.

However the ONS cautioned against direct comparisons with other [countries as most – with the exception of the United States – had not yet undertaken the same type](https://www.financedigest.com/global-automotive-fuel-nozzle-market-by-manufacturers-countries-type-and-application-forecast-to-2031.html "Global Automotive Fuel Nozzle Market By Manufacturers, Countries, Type And Application, Forecast To 2031") of in-depth revisions as Britain had.

The downward [revision in GDP](https://www.financedigest.com/spain-q2-quarterly-gdp-growth-revised-to-1-5-from-1-1.html "Spain Q2 quarterly GDP growth revised to 1.5% from 1.1%") reflected lower contributions from healthcare and retailers than previously thought.

The health service faced higher costs than we initially estimated, meaning its overall contribution to the economy was [lower,” ONS statistician](https://www.financedigest.com/uk-energy-bill-help-wont-lower-inflation-statisticians-rule.html "UK energy bill help won’t lower inflation, statisticians rule") Craig McLaren said.

The ONS had already factored in a fall in routine care [provided by Britain’s National Health Service as it focused on treating COVID-19](https://www.financedigest.com/recovery-bus-provides-cool-relief-for-s-koreas-covid-19-testers.html "‘Recovery bus’ provides cool relief for S.Korea’s COVID-19 testers") patients and limiting the spread of the disease in hospitals.

A closer look at the increased costs faced by individual retailers also led to a downward revision of the sector’s contribution, while factory output was revised up to take account of [lower raw material costs](https://www.financedigest.com/bmw-bets-on-design-and-recycling-not-mining-to-lower-battery-costs.html "BMW bets on design and recycling, not mining, to lower battery costs").

[Britain’s economy bounced back sharply last year](https://www.financedigest.com/2043-the-year-britain-will-turn-cashless.html "2043: The year Britain will turn cashless") and recovered its pre-pandemic size in November 2021. But fast-rising inflation means the Bank of England [expects the economy will slip back into recession](https://www.financedigest.com/german-economy-expected-to-skirt-recession-economy-ministry-report.html "German economy expected to skirt recession – economy ministry report") later this year.

The ONS will publish [updated growth](https://www.financedigest.com/blood-thawing-systems-market-analysis-growth-opportunities-future-demand-and-leading-players-updates-by-forecast-2030.html "Blood Thawing Systems Market Analysis, Growth Opportunities, Future Demand and Leading Players Updates by Forecast 2030") figures for 2021 and the first half of 2022 on Sept. 30.

(Reporting by David Milliken; Editing by Alex Richardson)


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