With two consecutive quarters of Gross Domestic Product (GDP) decline, the UK has officially entered its worst-ever recession as the Covid-19 pandemic continues to affect day-to-day life in the country.
The most significant blow came in Q2 (April-June) of 2020, during which period the UK’s GDP shrank by 20.4% – the worst crash since quarterly records were originated in 1955. This is the first recession the UK has experienced since 2009 and, according to CNN, the “deepest recession of any major global economy”.
The GDP decline during Q2 of 2020 is approximately double that experienced in the US, and is significantly higher than figures released by neighbouring European countries, including Germany and France. In a statement to the BBC, Chancellor Rishi Sunak described the situation as “unprecedented”. Sunak told the Financial Times: “Today’s figures confirm that hard times are here . . . But while there are difficult choices to be made ahead, we will get through this.”
This “flash recession” is the result of both Covid-19 lockdowns and the mass industry shutdown which followed. Despite the record drop, there is good news on the horizon: the UK’s GDP began to recover in June as lockdown measures were gradually lifted, with GDP increasing by 8.7%.
Investors also seem unsurprised and unshaken by the announcement; the FTSE 100 ended business on August 12, 2020 with its highest closing level since July 17. Jane Smith, research director at the Resolution Foundation, told the Financial Times: “Although today’s data tells us that the economy is recovering as lockdown restrictions ease, it still has a long way to go. And that challenge will be bigger for the UK than for most other rich countries.”
According to the Office for National Statistics, the number of people in work fell by 220,000 between April and June, with Prime Minister Boris Johnson saying the UK still has a “long, long way to go”. In the past, financial crises have also been linked to an uptick in mental health issues among those affected. A 2012 study estimated that the 2008-2009 recession “led to about 1000 excess suicides in England”.
As recent King’s graduates enter this unprecedented job market, their prospects seem, to some, rather bleak. Rachel Brooker, a recent King’s History and IR graduate, told Roar: “I think the current political and social climate has made me very convinced that doing a Masters was the right decision, as I feel graduating into a recession after Covid is a terrifying prospect. There aren’t really any jobs, and internships were basically cancelled. It’s quite terrifying to know there may not even be any jobs when I graduate next year.”
A recent graduate of the Classics department, who wished to remain anonymous, voiced similar fears, saying: “I’ll be honest and say I just feel really hopeless about it all, especially given the already competitive nature of museum jobs.” One of their fellow students told Roar: “It’s pretty bleak. Although my friends and I are trying to keep an overall positive outlook – we’ve worked hard and it’s paid off with our results – it really sucks to be graduating into a full-on economic recession.”