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  • The dramatic economic effect of the lock down was laid bare tonight, with figures showing that the U.

  • K economy shrank by more than 1/5 in April.

  • That's the largest monthly contraction ever recorded in our first full month in lock down.

  • The slump of 20.4% in economic growth is three times larger than that seen during the whole of the financial crisis 12 years ago.

  • The Office for National Statistics says it's affected almost all areas of economic activity, with house building and car manufacturing particularly badly hit.

  • The UK is now on course for a recession, which is two consecutive quarters of negative growth.

  • But analysts say that April was likely to have seen the worst month.

  • Our economics editor Faisal Islam, has this report.

  • A massive hit to the economy is no surprise when streets of silent shops are closed, factories idle and tens of billions of sales don't happen because they cannot.

  • But such a slump on this scale in one month isn't just a record.

  • It was unimaginable and way beyond any normal scale.

  • Marlowe Zoo One example of a leisure attraction who shut down during the pandemic, is seen in these numbers.

  • April had Eastern it this year, and so we were expecting about 70,000 guests to come here tomorrow well, to enjoy the zoo.

  • And in the end, we got nobody it'll.

  • So whilst we're expecting about £1.8 million in terms of visitor income for that month, we didn't receive anything until, say, disastrous.

  • Really April for us.

  • In April, the first full month of lock down the economy fell by just over 20% losing 1/5 of its total value.

  • It means since the pandemic on the lock down began in March, the U K economy has lost 1/4 of its value.

  • That's the cliff in this chart, making the financial crisis in 2000 and eight resemble a small blip.

  • The question.

  • Where do things go from here for a dynamic, creative economy way depend so much on human contact.

  • We have been very hit badly hit by by this, but we're also amazingly resilient on creative.

  • We will bounce back.

  • There was a report that came out.

  • It's a couple of days ago from the Ori CD.

  • That group of industrialized nations on it suggested that the drop in GDP for this year for the UK would actually be worse than for every other industrialized nation.

  • So we're in a very, very difficult situation as a country in Oxfordshire, an airfield with tens of million's worth of vehicles waiting for the show rooms to sell again and in turn, meaning the car factories will be far from full tilt.

  • So this is what those grim numbers look like in reality.

  • Up and down the country storage areas, airfields, ports fall off unsold cars in April and 99.7% form in car sales.

  • The challenge now as locked down just starts to ease this.

  • Will it actually return to normal?

  • Will these cars actually sell, or is the economy fundamentally damaged?

  • In Germany, they funded thousands of euros for new purchases of green cars and slash v 80 as part of a massive second rescue package here, more support on its way, signaled by the Bank of England.

  • We have to be ready and ready to take action, not just the Bank of England, but more broadly on what we can do get to offset those longer term and damaging effects.

  • For the moment, the government is focusing on a gradual reopening, for example, of the housing market, we're just starting to recover.

  • I do believe it will take a leased to the end of the year to come close whether we'll even get there.

  • But you know, I feel positive that there's enough people we want to move on.

  • And if there's enough people that want to move, then people will selling.

  • People will buy.

  • There's much lost ground to make up in Jim's, too.

  • With the added challenge of whether people will use gyms in a new normal, the fitness sector has proved before that it's particularly resilient in a recession on I think will benefit greatly from the tail wind provided by the pandemic.

  • Actually, we've never seen a week a month.

  • The economy, far from fighting, fit the question just how long the process of rehabilitation will take.

  • Faisal Islam BBC News Well, the economic uncertainty has led to calls for trade talks with the U following Brexit to be extended beyond the end of this year.

  • But the government has ruled that out, with Cabinet Minister Michael Goave saying he'd formally confirmed to the U that there will be no delay but checks on goods coming here from the EU will be phased in next year to give businesses time to adjust.

  • Our political correspondent Alex Forsyth reports.

  • It's not being business like this for months, many firms disrupted because of the virus and at the end of this year, another big change could be brewing Our current trade terms.

  • With the you end on, there'll be no extension whether there's a new deal or not, we would not be extended.

  • That's it.

  • We are leaving the transition period on December the 31st that provides clarity and certainty to business on our announcement today.

  • Allies Business The plan Inappropriate and flexible way.

  • The UK left the EU on January the 31st allowing a year where not much changed toe workout future relations.

  • Those talks haven't made huge progress.

  • So on Monday the prime minister will meet you figures to try and get things moving.

  • Because December the 31st is the deadline for a new trade deal to be agreed on.

  • That won't be extended, although some still think it should be on why to take away the risk off a nor deal.

  • Oh, come on, also to make sure that all of us remain focused on supporting business through the post corded recovery.

  • I'm not making the challenges that the economy and our businesses face any worse than it already is.

  • For some businesses, though, some relief today, this fashion firm imports from and exports to the EU and today the government said from January it would relax new rules on some goods coming in six months, grace for customs paperwork and payments, which was welcomed here.

  • Setting up a whole new border control system in seven and eight months wouldn't be realistic, and I think the UK consumer will benefit from that.

  • The government insists it's not backtracking on previous plans, arguing that a phased approach to new customs checks is pragmatic in the current economic climate that the U is not reciprocating, saying it will be ready for controls on imports come January.

  • Brexit may not have dominated here of late, but that doesn't mean the political pressures eased.

  • The government was re elected with a significant majority with a strong mandate to get on with Brexit.

  • If the government's gonna fulfill the commitments on which it selected, we need to have those customs processes and our borders fully operational as soon as we can.

  • For businesses, certainty as ever is key.

  • Even more so, given the turmoil of Corona virus, while a slower approach to new border checks might be welcomed by some is whether a trade deal could be done, that remains crucial to many.

  • Alex is in West Minister now, Alex Corona Virus and Brexit.

  • These air two huge issues in the government's in front, yes, re.

  • So I think that's right.

  • And on Brexit, the fact the government is relaxing the timetable for those new custom checks is something of an acknowledgment of the disruption that businesses are currently facing.

  • But the big questions off course whether a trade deal can be agreed in the timetable the government has now committed to and both EU and the UK say is possible.

  • They've agreed to accelerate talks in coming weeks.

  • But there are still big gaps between the two sides, so it will require significant compromise on.

  • Of course, the backdrop to all of that is the economic picture that was painted so starkly by those figures released today.

  • And it may not be a surprise, of course, that the economy took such a hit during the lock down period.

  • But what is key now is whether the recovery is fairly relatively quick or whether there is lasting deep damage.

  • And remember that this was a government that was elected on a platform to get Brexit resolved, but also to tackle some of the regional, the societal, the economic inequalities in this country.

  • And I think what is clear now on both fronts is simply the scale of the challenge the government is now facing.

  • Okay, Alex.

  • Many thanks, Alex Forsyth ER in Westminster.

The dramatic economic effect of the lock down was laid bare tonight, with figures showing that the U.

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UK economy shrank 20% in April due to lockdown - BBC News

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    林宜悉 posted on 2020/07/02
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