The UK economy has hit crisis point. New figures today show that the country has plunged into its deepest recession since records began.
Britain’s economic downturn is also the worst of any G7 country and the most significant decline in the EU.
Office for National Statistics (OFS) analysis revealed that GDP fell by 20.4 per cent – more than a fifth, and double the drop seen in the US during the same period – over the last quarter following Covid-19 taking hold and the subsequent lockdown.
It’s an economic crisis threatening to drive a wave of homelessness and soaring poverty. That’s why we’re building the Ride Out Recession Alliance, working with expert partners like Shelter to forge a way forward without letting thousands fall through the cracks.
And the pandemic has turned back the clock on financial progress, with GDP now at the same level as in 2003.
Covid-19 restrictions forced public spending down by a quarter while shops closed and businesses adapted to remote working.
And figures show that as many as 730,000 jobs were lost since March, hitting younger (18-24) and older (65+) workers the hardest – something experts called “just the lull before the storm“. It was the biggest drop in employment since the fallout from the financial crisis in 2009. Meanwhile women and disabled people are being impacted disproportionately by the economic downturn.
The Government’s furlough scheme has kept more than nine million people out of unemployment so far during the crisis, but it’s set to end in October. Shadow chancellor Anneliese Dodds warned that to wind down the job retention initiative as the employment crisis is only truly beginning would be a mistake, adding: “The prime minister will say there’s only so much he could do during a global pandemic but that doesn’t explain why our economy is tanking so badly compared to other countries.”
Those who have already lost jobs and turned to the welfare system to help them get by are finding that it’s still a struggle to get by. The number of Universal Credit claimants had soared to 4.2 million by April, while the number of families whose income is being limited by the benefit cap has seen the biggest spike since the policy was introduced in 2013.
It is a crisis experts across the board have been warning of since March and we are only now starting to see the true impact. Jonathan Athow, deputy national statistician for economic statistics at the OFS, said we can expect more cracks to appear in the labour market in the coming months. Hundreds of thousands are at risk of destitution and, as the August 23 end to the eviction ban approaches for England’s tenants, at risk of homelessness.
The Big Issue has launched the Ride Out Recession Alliance to prevent this. We are fighting to hold thousands back from the financial cliff-edge that could result in a homelessness disaster. Read more to find out how we’re bringing together most innovative, urgent ideas from experts across housing and job creation.
Behind the statistics are a growing number of fearful people. To work to do something about this, we want to gather the stories of how you are being impacted by the crisis. If we can understand the extent, we can do something about it. Nobody should be living in fear and fighting a battle to keep a roof over their head. Tweet us, send us a message on Facebook or email email@example.com.