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UK economy shrinks 2.6% in November on virus curbs

LondonUnited Kingdom, Jan 15 – The British economy slumped 2.6 percent in November, official data showed on Friday, hitting reverse on the back of government restrictions aimed at curbing the spread of the coronavirus.

Gross domestic product nosedived in November from upwardly-revised 0.6-percent growth in October, the Office for National Statistics said in a statement.

The figures meant the economy was 8.5 percent smaller compared with its pre-pandemic level in February, it added.

England was placed in partial lockdown in November as the government raced to curb spiking Covid-19 infections, while there were also restrictions in Wales, Scotland and Northern Ireland.

Britain then imposed a strict lockdown earlier this month, similar to the first national coronavirus curbs in place from March to June, as it sought to halt a variant Covid-19 strain that is said to be more transmissible and has sparked surging infections.

“The economy took a hit from restrictions put in place to contain the pandemic during November, with pubs and hairdressers seeing the biggest impact,” said Darren Morgan, ONS director for economic statistics.

“However, many businesses adjusted to the new working conditions during the pandemic, such as widespread use of click-and-collect as well as the move online.

“Manufacturing and construction generally continued to operate, while schools also stayed open, meaning the impact on the economy was significantly smaller in November than during the first lockdown.”

He added: “Car manufacturing, bolstered by demand from abroad, housebuilding and infrastructure grew and are now all above their pre-pandemic levels.”

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British finance minister Rishi Sunak echoed his remarks from last week when he declared that the economy would worsen before any recovery started to take hold.

 

– ‘Reasons to be hopeful’ –

 

Sunak also expressed optimism due to the rollout of vaccines and the government’s virus stimulus policies, including its furlough jobs support scheme that pays the bulk of private sector wages until April.

Britain has been the  European nation worst hit by the devastating pandemic with a death toll of more than 86,000 people.

The government is pinning its hopes on a mass vaccination drive, which has so far seen around three million people inoculated.

“It’s clear things will get harder before they get better and today’s (GDP) figures highlight the scale of the challenge we face,” Sunak said on Friday.

“But there are reasons to be hopeful — our vaccine rollout is well underway and through our Plan for Jobs we’re creating new opportunities for those most in need.

“With this support, and the resilience and enterprise of the British people, we will get through this.”

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November’s downturn also came ahead of Britain’s final divorce from the European Union at the end of December when it formally left the EU’s single market and customs union.

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