The UK economy has suffered a sharper slowdown than in 2008 as the coronavirus “flung businesses into the abyss,” with experts warning it could trigger the worst recession in modern history.
A closely watched survey shows UK business activity has nosedived at a faster rate even than at the height of the financial crisis more than a decade ago.
Both manufacturing and the UK’s dominant services sector, including everything from banking to retailers, have suffered sudden and steep declines in work. Firms say demand for goods and services has collapsed as growing numbers of firms and households shut their doors.
Hotels, restaurants, sports centres, and hair salons have been particularly hard hit. Global supply chain disruption because of the pandemic has also left manufacturers facing the steepest monthly drop in delivery times since records began in 1992.
The survey by IHS Markit and the Chartered Institute of Procurement & Supply (CIPS) also suggests the worst is yet to come. It came before the UK government ordered restaurants, pubs and other venues to close on Friday and all non-essential shops to close on Monday.
Chris Williamson, chief business economist at IHS Markit, said: “The surveys highlight how the COVID-19 outbreak has already dealt the UK economy an initial blow even greater than that seen at the height of the global financial crisis.
“With additional measures to contain the spread of the virus set to further paralyse large parts of the economy in coming months, such as business closures and potential lockdowns, a recession of a scale we have not seen in modern history is looking increasingly likely.”