World News

UK economy struggled before coronavirus crisis escalated

LONDON (Reuters) – Britain’s economy was almost stagnant in the three months to February, before the coronavirus crisis escalated and pushed the country into what is likely to be a historic recession, official data showed on Thursday.

Gross domestic product rose by 0.1% in the December-February period, the Office for National Statistics said, weaker than a median forecast for growth of 0.2% in a Reuters poll of economists.

Paul Dales, an economist with Capital Economics, said the figures were the last that would look anything like normal for a while.

“The coronavirus lockdown will mean that in March and April GDP will fall at a speed and magnitude no one has ever seen and no economy has ever experienced before,” he said.

In February alone, when flooding hit shopping and construction, GDP fell by 0.1% compared with a forecast for growth of 0.1% in the Reuters poll.

Annual growth in the economy was its slowest since the middle of 2012 as GDP rose by just 0.3%, the ONS said.

Separate trade data showed Britain’s goods trade deficit widened to nearly 11.5 billion in February, wider than a forecast gap of 6.0 billion pounds in the Reuters poll.

Britain’s underlying trade balance — including its services industries but excluding often volatile movements in gold and other precious metals — went into surplus for the first time in more than 20 years of records in the three months to February.

But the ONS said that reflected a large fall in imported goods which was stronger than a fall in exports.

(Writing by William Schomberg; Editing by Catherine Evans)