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UK economy shrank by 2.6% in November - BBC News

UK economy shrank by 2.6% in November - BBC News

UK economy shrank by 2.6% in November - BBC News
Jan 15, 2021 2 mins, 3 secs

The UK economy shrank by 2.6% in November as England was placed in lockdown for a second time, official figures show.

The hit to the service sector - which accounts for about three-quarters of the UK economy - meant it contracted by 3.4% in November, and is now 9.9% below the level of February 2020.

Some economists said the November figure was better than expected, and it appeared many companies were better prepared for the second lockdown, with some sectors staying open for business and many firms having already put in place plans to expand online operations.

Chancellor Rishi Sunak said the figures showed "it's clear things will get harder before they get better and today's figures highlight the scale of the challenge we face".

But he said the vaccine roll-out and economic support measures meant there were reasons to be hopeful.

Shadow chancellor Anneliese Dodds said the figures showed the UK has an economic "mountain to climb".

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

He added: "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.

But the measurement most people focus on is the percentage change - the growth of the country's economy over a period of time, typically a quarter (three months) or a year.

Rory Macqueen, from the National Institute of Economic and Social Research, said the November figures confirm a significant slowdown in the last quarter of 2020, "despite November's lockdown in England clearly having a far smaller effect than the first".

But, he said, the real "story of the year will be a vaccine-driven bounce back in economic activity for sectors like hospitality and leisure".

"The economy has built up a fair bit of immunity to lockdowns, as November's lockdown was much less painful for the economy than the first lockdown.

The fall in the economy in November was still considerable, but the figures show businesses adapting to difficult conditions.

The trade figures also showed a £7bn increase in EU imports in the three months to November as traders stockpiled car parts, medicines and other goods ahead of the end of the Brexit transition period.

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