Britain’s Economy Hit Hard in 2020, New Strains to Affect 2021 Growth
Britain’s economy suffered the worst ever downturn ever recorded during 2020 on account of the coronavirus pandemic, with annual output declining to an over 300-year low. In an attempt to offset some of the economic damage, the Bank of England slashed interest rates to record lows while borrowing surged higher.
While the pandemic hit almost every single economy around the world, Britain suffered more severely than most of its peers as its economy was already under strain due to Brexit concerns. In 2019, Britain’s economy grew by a meagre 1.4% – the slowest rate of growth seen since the 2008-09 global financial crisis.
Fears of a possible no-deal Brexit had ensured that the British economy started 2020 on an unsure footing to begin with, and a few months later, coronavirus struck and lockdowns brought economic activity to a halt. The British economy contracted by 3% in Q1 2020 followed by a more severe 18.8% decline in Q2, causing a technical recession in the country.
Even though towards the end of the year, the rollout of the COVID-19 vaccine brought in some hopes for economic revival in Britain, the sentiment soured once again after the discovery of the new and more contagious strains of coronavirus, sending Britain into lockdown once again. The finalizing of the Brexit deal, however, did offer some respite, but analysts have revised economic outlook for 2021 lower on account of the latest round of restrictions imposed.
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