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'Unprecedented' impact of pandemic on UK economy revealed in ONS report

The UK economy shrank at the fastest pace since the financial crisis in the first quarter of 2020 as coronavirus forced the country into lockdown.

The Office for National Statistics (ONS) said the economy contracted by 2% in the three months to March, following zero growth in the final quarter of 2019.

The decline was driven by a record fall in March, and reflects just one full week of lockdown.

Analysts said the economy would suffer a bigger slump in the current quarter.

This is the first official growth estimate since the government introduced social distancing measures at the end of March.

Suren Thiru, Head of Economics at the British Chambers of Commerce, said: “The contraction in UK GDP in the first quarter underscores the negative impact that Coronavirus had on the economy, even at its earliest stages. The quarterly decline was driven by a sharp drop in monthly GDP in March with activity in all sectors contracting as the UK went into lockdown.

“The speed and scale at which Coronavirus has hit the UK economy is unprecedented and means that the Q1 decline is likely to be followed by a further, more historically significant, contraction in economic activity in Q2.

“While a swift ‘V-shaped’ economic revival as restrictions are lifted may prove too optimistic, government support can play a vital role in avoiding a prolonged downturn. The extension of the furlough scheme was a crucial first step, but more needs to be done to ensure that the right support is in place to deliver a successful restart of the economy.”

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