Britain: worst economic recession in 300 years

The English economy is on the brink. Between March and May, as a result of the coronavirus crisis, gross domestic product in the United Kingdom plunged 19.1% compared to the previous three months from December to February. And the future looks bleak. According to forecasts from the Office of Budget Responsibility, the country is set to register its worst recession in three hundred years, with an annual contraction in GDP of more than 10%.

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From March to May, the services sector, which represents 80% of the British economy, fell by almost 19%. The construction sector fell by almost 30%. A recovery in activity was observed in May, particularly in distribution, with a record online sales. But the rebound is far too weak (1.8%) to reassure the markets. Especially with the restrictions on movement and confinement still largely in place in May, "a lot of areas have seen their activity decline further , " observes the National Statistics Office.

According to Capital Economics, this upturn is "a disappointing first step on the road to recovery and suggests that hopes for a rapid rebound in containment are not realistic" . Many also doubt a possible recovery in "V", namely a recovery as sharp as the contraction was brutal.

The government, which has already put in place a plan to support the economy - public sector borrowing now amounts to £ 322 billion - still has much to do. To the coronavirus shock is added the threat of a Brexit without agreement. The countdown to find a compromise with Brussels before the end of the transition period in late December is accelerating and negotiations between London and the EU are deadlocked. Worse: according to a recent study, three-quarters of companies in the country are not ready for Brexit. Suffice to say that for the English economy, coronavirus and Brexit could well constitute a double penalty.