By Anna Ellis •
Updated: 30 Jun 2022 • 18:54
UK economy suffered largest hit since First World War due to Covid. Image UK government Twitter.
The government said it will be years before we fully understand the impact of the pandemic on the economy.
The first point mentioned was regarding economic activity in 2020 when the UK’s GDP fell by an estimated 9.3 per cent which is the largest hit to economic output in one calendar year since the post-World War I recession.
The government confirmed that this was the combined effect of the economic hit from the pandemic, the restrictions put in place to control it, and the economic policies implemented to support people and businesses.
The second economic activity mentioned was borrowing and the Government borrowed an additional £330 billion across 2020-21 and 2021-22.
This was partly to fund the response to Covid and partly because of the fall in economic activity.
This was record peacetime borrowing and has caused the nation’s debt to rise to a level not seen since the early 1960s.
The final economic activity mentioned was unemployment: A 10 per cent ‘ish’ hit to activity could reasonably have led to unemployment reaching 9-12 per cent but in the event, UK unemployment peaked at 5.2 per cent.
The story is of an extraordinary hit to the size of the economy. And a massive rise in government borrowing. In truly unprecedented circumstances for an economic shock
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Originally from Derbyshire, Anna has lived in the middle of nowhere on the Costa Blanca for 19 years. She is passionate about her animal family including four dogs and four horses, musicals and cooking.
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