U.K. Suffers Sharpest Economic Contraction in Centuries
February 11, 2021
To find a comparison to the economic impact the coronavirus had on the U.S., economists have to go back nearly 80 years, describing the downturn as the most severe “since World War II.” To contextualize the slowdown in the U.K., you have to go back much farther.
Gross domestic product in the U.K. shrank by 9.9% last year, the largest annual decline of any of the G7 nations. By comparison, the U.S. economy shrank 3.5%.
The decline in the U.K. was the largest in over 300 years, according to Bank of England data. The nation saw a comparable drop of 9.7% during the 1921 depression that followed World War I. The last time a bigger drop was recorded, however, was 1709, when the economy fell by 13% during an unusually harsh winter known as the Great Frost.
The good news for the U.K. is that they are leading most other nations in their vaccine rollout, and the Bank of England expects a robust rebound of consumer spending in the second half of the year.