PROFESSOR DYLAN JONES-EVANS

This week’s economic data confirmed what everyone already knew several weeks ago namely that the UK economy had entered a recession during the second quarter of 2020, shrinking by over 20 per cent in the period April to June of this year.  Comparisons with other countries suggest that this could be the worst economic hit for any major economy from Covid-19 during this period although it is fair to say that the UK was also one of the last countries in Europe to lockdown its economy. As expected, the biggest impact has been on the accommodation and food services with estimates that output had shrunk by 87% across the three months with other statistics showing that only a quarter of businesses in this sector remained open as compared to four out of five firms in the rest of the economy. In addition, labour market data also showed that over the same period, employment in the UK fell by the largest amount since the last recession with the number of people in work decreasing by 220,000....

Earlier this week, officials from the International Monetary Fund (IMF) arrived in London to undertake their annual review of the UK economy. And there will be renewed optimism from the UK Government about the state of the economy, following the better than expected GDP growth figures for the first quarter of 2013, which confounded most economic commentators, many of whom had predicted no growth or even a slide into an unprecedented triple recession. The question, of course, is whether this growth can continue after what can only be kindly described as a flat period for the nation? Certainly, recent data seems to suggest that the increase in GDP may not be a one-off and that we can look forward to a period of sustained growth in the immediate future. According to the National Institute for Economic and Social Research, the UK economy grew by 0.8 per cent in the three months to the end of April. This follows a report from the accountancy body ICAEW that suggested business confi...

Last week, there was genuine surprise amongst most economists when it was announced that the UK economy had grown by 0.3 per cent in the first three months of 2013. Many doomsayers had been talking down the prospects of growth and had predicted that we would fall into an unprecedented ‘triple dip recession’. Clearly that did not happen and we can now hope that this can be built upon over the rest of the year and that businesses and consumers will start feeling more positive about future prospects. However, it is worth noting that this growth was driven solely by an increase in the service sector, with manufacturing and construction contracting over the period. A high value added manufacturing industry is important to a competitive economy and therefore the lack of growth by Britain’s factories is worrying. However, given that around half of all exports are to the still depressed eurozone, this continuing decline should not be too surprising. Many will continue to be dismayed...