Key Highlights
- Britain economy sunk into its deepest recession on record in Q2 2020
- Britain’s GDP dropped -20.4% compared to Q1 2020
Think the current US recession is bad? Think again because Britain’s recession is worse, two times worse. The British economy contracted by 20% or one-fifth in Q2 2020 compared to Q1 2020.
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Decline in Gross Domestic Product (GDP) in Q2 2020 compared to Q1 2020 looks like this:
- US – -9.5%
- Germany – -10.1%
- Canada – -12.0%
- Great Britain – -20.4%
Why is the British economy in such bad shape? The Office for National Statistics identified these reasons:
- Lockdowns due to COVID-19 were in place in Britain for a longer period of time compared to other European economies
- Britain was slow to introduce a national lockdown compared with other European neighbors which meant that the virus had longer to spread in Britain’s pubs and restaurants
- Britain’s lockdowns affected a greater share of the population for longer periods of time compared to state-by–state shutdowns in the US
- An Oxford University index on the strictness of government shutdowns in schools, workplaces and on travel bans were stricter in Britain during Q2 2020 than in Germany, Italy, Spain and the US
According to Samuel Tombs, an economist with Pantheon Macroeconomics, believes that Britain’s more severe recession can be the attributed to the government’s slow response to the pandemic, which then necessitated a longer, stricter lockdown in Q2.
Even though the British economy began to climb +8.7% in June when construction activity essentially resumed and consumer spending began to kick in, the Bank of England indicated that it expects the country’s economic recovery to take at least 12 – 16 months, or the end of 2021.
How does Britain’s economy impact Britain’s housing market? According to Zoopla, the average price for property in London stood at L653,965 in August 2020, a rise of +4.3% since May 2020 and fall of -2.19% compared with 12 months ago.
Thanks to Zoopla and The New York Times.
Also read: Residential Refinances Over 50% of Home Loans in Q1 2020, Home Affordability Increasing for Workers, Rural Airbnb Bookings Surging
