2020.08.1206:31:00UTC+00UK Economy Enters Deep Recession In Q2

The UK economy contracted for the second straight time in the second quarter amid the coronavirus pandemic although there was some pick up in June after government relaxed restrictions on movement, data from the Office for National Statistics showed Wednesday.

Gross domestic product contracted by 20.4 percent sequentially in the second quarter, following a 2.2 percent drop in the first quarter. Economists had forecast a quarterly fall of 20.5 percent.

The latest fall was the biggest contraction since the records began in 1955.

On a yearly basis, GDP plunged 21.7 percent in the second quarter but smaller than the economists' forecast of 22.4 percent.

In June, GDP growth accelerated to 8.7 percent from 2.4 percent in May.

There have been record quarterly falls in services, production and construction output in the second quarter. Services output decreased 19.9 percent and production output fell 16.9 percent. Construction output contracted more sharply by 35.0 percent.

Private consumption accounted for more than 70 percent of the fall in the expenditure measure of GDP in the second quarter, falling by a record 23.1 percent.

Gross fixed capital formation declined 25.5 percent and business investment was down 31.4 percent. Meanwhile, government consumption advanced 14.1 percent.

The UK posted a trade surplus of 4.0 percent of GDP in the second quarter, data showed.

In June, the visible trade deficit widened to GBP 5.12 billion from GBP 1.76 billion in May. Exports and imports climbed 6.9 percent and 18.8 percent, respectively.

Consequently, the total trade surplus declined to GBP 5.34 billion from GBP 7.66 billion a month ago.