The UK economy shrank in November for the first time since the initial COVID-19 lockdown last spring, hit by a tightening of social-distancing rules.
The 2.6 percent monthly decline was much smaller than most analysts expected — a Reuters poll had pointed to a 5.7 percent contraction — but several economists said the nation was still likely to suffer a double-dip recession.
The British economy, which shrank more sharply than any other major advanced economy in the first half of last year, is now 8.5 percent smaller than it was before the start of the COVID-19 pandemic in February.
Photo: Reuters
“It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face,” British Chancellor of the Exchequer Rishi Sunak said.
However, the rollout of vaccines in Britain — which has been faster than elsewhere in Europe — was a reason to be hopeful, Sunak said.
Several economists warned that Britain was still on course for renewed recession, with the economy likely to shrink in both the final quarter of last quarter and the first three months of this year.
“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,” British Chambers of Commerce head Suren Thiru said.
The scale of the hit to the economy in November was much smaller than in the first lockdown last year, something the UK Office for National Statistics (ONS) attributed to businesses adjusting to social-distancing rules and schools remaining open.
However, with a third, tougher lockdown now in place, and the impact of the nation’s new, less open trading relationship with the EU also a drag on business, the country is facing major challenges early this year.
Bank of England Governor Andrew Bailey this week said that it was too soon to say if further stimulus would be needed after the central bank ramped up its bond-buying program to almost £900 billion (US$1.22 trillion) in November.
The data showed that the British economy in November was 8.9 percent smaller than a year earlier, a smaller drop than the 12.1 percent fall forecast in a Reuters poll.
In October the economy had been 6.8 percent smaller than a year before.
At its lowest point in April, when many businesses closed temporarily, output was a record 25 percent below its year-ago level.
November’s downturn was led by the services sector, where output fell 3.4 percent from October as pubs, restaurants, non-essential shops and many other consumer services businesses had to shut as part of a four-week lockdown in England and similar measures in other parts of the UK.
Part of the scale of the hit to Britain’s economy last year reflects a decision by the ONS to take account of disruption to routine medical care and schooling due to COVID-19, an approach which not all countries’ statistics agencies have taken.
Bank of England Deputy Governor Ben Broadbent has estimated this factor accounted for a quarter of the almost 9 percent annual drop in output recorded for the third quarter of last year.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last