Hospitality Sector ‘Worst Hit’ By Pandemic As UK Enters Recession

The COVID-19 outbreak and ensuing lockdown has led to the United Kingdom’s first recession in 11 years, with hospitality being the ‘worst hit, according to new data from the Office for National Statistics (ONS) released this morning, officially confirming that the UK economy is in recession.

The economy fell by 20.4% during Q2 between April to June, when the country was in lockdown due to the coronavirus pandemic, compared with the three months from January to March in Q1, which fell by 2.2%.

ONS deputy national statistician for economic statistics Jonathan Athow said: “The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record.

“Overall, productivity saw its largest fall in the second quarter since the three-day week. Hospitality was worst hit, with productivity in that industry falling by three-quarters in recent months.”

“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover. Despite this, GDP in June still remains a sixth below its level in February, before the virus struck.”

Following the announcement chancellor Rishi Sunak warned of “hard times ahead” adding : “Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will, but we will get through this.”

Alpesh Paleja, CBI Lead Economist, said: “This confirms the economic pummelling from the essential public health measures put in place to contain Covid-19. With people’s movement restricted over the second quarter, it’s unsurprising that sectors like hospitality, arts and entertainment felt the full brunt of lockdown.

“Encouragingly, the economy grew in May and June, indicating that the early stages of a recovery are underway. Yet cashflow constraints are still biting hard for businesses, and with the pandemic not going away anytime soon, a sustained recovery is by no means assured.

“The dual threats of a second wave and slow progress over Brexit negotiations are also particularly concerning, underlining the need for maximum agility from Government on both these issues, allowing a greater focus on the economy’s long-term future.”