0800 644 6080
Call FREE from Landline and Mobile
Est. 1989

Economy Tips into Recession Following Worst Slump on Record

Written by: Keith Tully

Recession 2020The UK economy has officially fallen into recession after suffering the sharpest downturn on record between April and June of this year.

A GDP contraction of 2.2 per cent was recorded for the first quarter of this year, with the coronavirus crisis having hit in the final few weeks of that period.

But the second quarter saw a much sharper downturn and the initial figures suggest that the UK economy shrank by as much as 20.4 per cent during those three months.

Suffering two consecutive quarters of contraction officially puts the UK into recession for the first time in over a decade.

The scale of the decline in overall output between April and June was greater than anything previously recorded in a single quarter by the Office for National Statistics (ONS) and a steeper downturn than the slumps suffered elsewhere among G7 nations.

Key drivers of the downturn of course have been the public health crisis around Covid-19 and the nationwide lockdown that became necessary because of it from late-March onwards.

Lockdown restrictions have been eased gradually in recent weeks but many businesses are still having to contend with a new normal and layoffs are becoming widespread across many parts of the economy.

On a more positive note, the ONS has said the economy was growing on a month-to-month basis recently, with June having seen an 8.7 per cent upturn in GDP.

Nonetheless, the underlying data shows that the UK economy was around a sixth smaller in June than it was in February before the coronavirus crisis hit.

Responding to the latest figures, the chancellor of the exchequer Rishi Sunak said: “I’ve said before that hard times were ahead and today’s figures confirm that hard times are here.

“Hundreds of thousands of people have already lost their jobs and, sadly, in the coming months many more will.

Alpesh Paleja, lead economist at the Confederation of British Industry, has described coronavirus as having given the UK an “economic pummelling”.

“Cashflow constraints are still biting hard for businesses, and with the pandemic not going away any time soon, a sustained recovery is by no means assured,” he said.

Keith Tully

Author
Keith Tully
Partner

Join Keith Tully on Linked In Follow Keith Tully on Twitter

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

Meet our Team of Experts
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
Processing...
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Desling with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
78
Number of UK Offices
30000
Directors Helped
70+
Licensed Insolvency Practitioners