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Hospitality biggest casualty as record UK recession confirmed

Published:  12 August, 2020

Britain’s economy shrank by 20.4% in the three months to June 2020, marking the deepest contraction currently of any major economy, with the Accommodation & Food sectors among the hardest hit, slumping by 86.7%.

(Chart shows ONS figs, January 2018-June 2020, against index of 100=2016.)

The widely expected figures, confirmed by the Office for National Statistics (ONS) today (12 August), also revealed that the lockdown period and subsequent gradual reopening of sectors had knocked 20% off wholesale and retail sales over the same period.

GDP for June remained 17.2% below the February 2020 level. A 2.4% pick up through May did, however, accelerate in June, with a more robust 8.7% expansion in the first full post-lockdown month.

During the lockdown period consumer spending fell 23.1%, representing two thirds of GDP, accounting for 70% of the economic slowdown, which has so far translated into 730,000 job losses since March.

The ONS data reported a June uptick in Accommodation in June as bookings picked up for the later part of the year, but the sector remained 92.2% below February.

In the Food sector, however, the report added that “all components of food and beverage services fell in April”, with June remaining 83.4% below February, but growth returning to some sub-sectors in June.

Takeaways suffered the least, although they were still very significantly down, with the ONS index of food and beverage services showing that the restaurant sector (based on larger operators) has swung back into modest growth in June, while pubs and bars continued to flatline.

The severity of the recession was highlighted by the ONS figures, equating to seventeen years of lost growth, returning the economy to the size it was in early 2003.