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Read MoreBCC responds to ONS GDP figures for November
BCC responds to ONS GDP figures for November
Commenting on GDP figures for November 2020 published today by the ONS, British Chambers of Commerce Head of Economics Suren Thiru said:
“The latest figures highlight the continued damage being done to the UK economy by coronavirus.
“The decline in output in November was largely driven by the drag on activity from the second lockdown, with consumer-focused services firms, who are most exposed to lockdown restrictions, enduring a particularly difficult month.
“With any post-lockdown rally in output in December constrained by the tougher tiered restrictions, including the introduction of tier 4 measures, the UK economy is likely to have contracted in the final quarter of 2020.
“A third lockdown means that a double-dip recession in the first quarter of this year may be inevitable, particularly if the current post-Brexit disruption persists through the quarter.
“A clear and comprehensive plan is urgently needed to support the economy throughout this year. This should include closing the current gaps in government support and providing more significant grant funding to support cash strapped businesses. A fit-for-purpose Test, Trace and Isolate system remains critical to keeping the economy moving once the current lockdown ends.”
UK GDP fell by 2.6% in November 2020
Following six consecutive monthly increases, including an upwardly revised 0.6% increase in October, real gross domestic product (GDP) fell by 2.6% in November 2020. Restrictions were in place to varying degrees across all four nations of the UK during November.
November GDP fell back to 8.5% below the levels seen in February 2020 compared with 6.1% below in October 2020. GDP fell by 8.9% in the 12 months to November 2020, compared with an annual decline of 6.8% to October.
The services sector acted as the main drag on growth in November, falling by 3.4% as restrictions on activity were reintroduced in some parts of the UK in response to the coronavirus (COVID-19) pandemic. The services sector is now 9.9% below the level of February 2020.
The production sector also fell marginally by 0.1% in November 2020, remaining 4.7% below the February 2020 level. Elsewhere the construction sector saw positive growth of 1.9% in November 2020, recovering to 0.6% above the February 2020 level.
There were falls in output in all 14 services sub-sectors between October and November 2020. The largest contributor to this fall was accommodation and food service activities, followed by wholesale and retail trade, other service activities and arts, entertainment and recreation, because of the reintroduction of restrictions in some parts of the UK. These four sectors accounted for nearly 80% of the fall in services.
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