The UK economy shrank by 2.6% in November as fresh lockdown restrictions in England reduced economic activity, official figures show.
The Office for National Statistics said it meant gross domestic product was 8.5% below its pre-pandemic peak.
November’s decline came after six consecutive months of growth, with a 0.6% improvement in October.
The services sector was hit hard, although some manufacturing and construction activity improved.
The closure of businesses such as pubs, hairdressers and many shops meant the sector contracted by 3.4%. The services sector is now 9.9% below the level of February 2020, the ONS said.
Chancellor Rishi Sunak said the figures showed “it’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face”.
However, he said the vaccine roll-out and economic support measures meant there were reasons to be hopeful. “With this support, and the resilience and enterprise of the British people, we will get through this,” he said.
ONS director for economic statistics Darren Morgan said: “The economy took a hit from restrictions put in place to contain the pandemic during November, with pubs and hairdressers seeing the biggest impact.
“However, many businesses adjusted to the new working conditions during the pandemic, such as widespread use of click and collect as well as the move online.
He added: “Manufacturing and construction generally continued to operate, while schools also stayed open, meaning the impact on the economy was significantly smaller in November than during the first lockdown.
“Car manufacturing, bolstered by demand from abroad, housebuilding and infrastructure grew and are now all above their pre-pandemic levels.”
Economist Rory Macqueen, from the National Institute of Economic and Social Research, said the figures confirm a significant slowdown in the last quarter of 2020, “despite November’s lockdown in England clearly having a far smaller effect than the first”.
Source: bbc.com
