Britain returns to recession; Job loss for 2,20,000 people! Data’s from April to June shows that
The UK economy moved a step closer to recession today after official data showed growth unexpectedly ground to a standstill in the second quarter of this year, the weakest performance since Britain was last in the economic slump in the early 1990s. The Office for National Statistics revised down its preliminary estimate for the gross domestic product (GDP) in the three months to June from 0.2% to zero growth. The figures shocked City analysts who had predicted a dip to 0.1% and was the bleakest reading since the second quarter of 1992. Annual growth is now just 1.4%, down from the initial reading of 1.6% and the weakest since the last three months of 1992The slowdown saw the prime minister, Gordon Brown, come under further attack for his handling of the economy, as he is no longer be able to boast of continuous growth since the Labour government came to power in 1997.
Figures for the first quarter from April to June are a clear indication that Britain is heading for another recession. In the first three months of the current financial year, GDP declined by 20.4 percent. Britain is set to become one of the most economically developed countries in the world.
The purchasing power of people has declined. Many shops and businesses closed. Factories and manufacturing sector activities are at a standstill. This is leading the country to a recession after 2009. The lockdown due to COVID-19 has severely affected the service sector. The closure of schools has paralyzed all businesses operating in the area. Hotels, Restaurants and car repair centers are the worst affected areas. Car production reached its lowest level since 1954.
According to official government figures, 2,20,000 people lost their jobs between April and June. But unofficial reports indicate that more than seven lakh people are unemployed In the UK in the wake of COVID-19. However, Chancellor Rishi Sunak warned that the current economic slowdown could lead to more job losses. Economists warn that only the tip of the iceberg is now visible and that worse reports are yet to come.
According to the latest figures, 9.6 million people in the country remain under the furrow scheme. With the scheme coming to an end in October, a large portion of these is likely to lose their jobs. The government now pays 80 percent of the salaries of these workers in dysfunctional establishments. If these institutions do not open after October, all of them will suddenly become unemployed.
Many large companies in the aviation, hospitality, and retail sectors are laying off thousands of employees every day. As the number of unemployed increases, so does the number of people applying for various government benefits.
The longer-term impact of the crisis on living standards will depend on the scale of the rise in unemployment and how long it lasts. So the government's priority should be providing support to those parts of the economy hardest hit by the crisis; supporting jobs while also helping those unlucky enough become unemployed.
