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Media captionRishi Sunak: “We’re grappling with something unprecedented”
Chancellor Rishi Sunak said the government is “grappling with something that is unprecedented” after figures showed the UK economy suffered its biggest slump on record.
The economy shrank 20.4% between April and June compared with the first three months of the year.
The two consecutive quarters of decline caused by the Covid-19 lockdown pushed the UK officially into recession.
Mr Sunak told the BBC that it was “a very difficult and uncertain time”.
Responding to fears that the economic turmoil could trigger mass unemployment, the chancellor said the government should not pretend that “absolutely everybody can and will be able to go back to the job they had”.
However, he added there would be support for creating jobs in new areas.
It is the first time the UK has been in recession since 2009.
During the lockdown, household spending plunged as shops were ordered to close, while factory and construction output also fell.
Shadow chancellor Anneliese Dodds blamed Prime Minister Boris Johnson for the scale of the economic impact, saying: “A downturn was inevitable after lockdown – but Johnson’s jobs crisis wasn’t.”
How are ordinary people being affected?
Kate Treglown, 44, of Walthamstow in east London, is currently out of work as a result of the coronavirus crisis. She was made redundant from her advertising job at the end of July after being on furlough.
“I worked for 16-and-a-half years for an advertising agency that promoted live events. The work totally dried up in May,” she told the BBC.
Image copyright Kate Treglown
Kate says she feels “stuck in limbo” – keen to try something new, but unsure of when her children – who she has been home schooling – will return to school.
“There is work. There are jobs available. But when I look on LinkedIn, every single job has hundreds of applications, so competition is very stiff,” she says.
“I feel women are really carrying the burden of this pandemic with regards to the childcare, whether working or not. It’s made me feel quite depressed at times.
“My redundancy money is only going to last so long and I’m scared of what the future holds for us at the moment.”
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Is there any sign of things getting better?
The Office for National Statistics (ONS) said the economy bounced back in June as government restrictions on movement started to ease.
On a month-on-month basis, the economy grew by 8.7% in June,