ReachExtra
According to the Office for National Statistics (ONS), the UK has fallen into the “largest recession on record” as UK economy plummets by 20.4% and Chancellor of the Exchequer predicts further job losses due to the lockdowns and other problems associated with the pandemic. ONS figures show some improvement as from May, but it is widely thought that this will not put a break on the general downward trend.
Chancellor of the Exchequer, Rishi Sunak warned in May 2020 “this lockdown is having a very significant impact on our economy, we are likely to face a severe recession, the likes of which we haven’t seen…”
Figures now published by the ONS show that the UK’s GDP has dropped by 20.4% in the second quarter of 2020 (April – June).
This is the second consecutive quarter of 2020 showing a decline in economic activity, following a 2.2% drop in the first quarter, meaning that the United Kingdom is now officially in recession.
Speaking to Sky News this morning (12.08.2020), Sunak said “I said that hard times were coming, and today’s figures show that hard times are here.”
“Hundreds of thousands of people have already lost their jobs and sadly, many more will.”
However, monthly figures have shown that the economy bounced back by 8.7% in June, following an upwardly revised growth of 2.4% in May as lockdown restrictions were eased.
The Deputy National Statistician at the ONS, Jonathan Athow said:
“The economy began to bounce back in June, with shops reopening, factories beginning to ramp up production and house-building continuing to recover.”
“Overall, productivity saw its largest-ever fall in the second quarter. Hospitality was worst hit, with productivity in that industry falling by three-quarters in recent months.”
Commenting on how the recession will play out in Gibraltar, the Chief Minister Fabian Picardo told ReachExtra in June:
“This is likely to be a short term bump in the road, which the whole world is going to go through, and I think Gibraltar will be the place that it is least acute and therefore you can continue to have the confidence that big investments that you might make in your life, like the purchase of a home, should not be in any way be affected by the moment through which the whole world is going to transition.”
In recent weeks there was the announcement by the international Gibraltarian-owned Bassadone Automotive Group of a £20m investment its Gibraltar production line which exported 6,400 vehicles in 2019.
Other sources indicate that there is currently a substantial amount of continuing interest in revamping Gibraltarian industries.
“There is no doubt that there may be trouble ahead and many of the established business models, not just in Gibraltar, but everywhere, have become obsolete. In Gibraltar we have always thrived on making the very best of bad situations, and the truth is that there is currently a great deal of new business in the pipeline. Perhaps not the kind of business that we have been accustomed to but new business which will hopefully take the sting out of the recession,” said commercial lawyer Charles Gomez.
