UK in recession as economy slumps 20%

The UK economy has fallen into recession after a huge contraction in the first six months of the year - which included the biggest quarterly drop in growth on record.

Official figures on Wednesday (August 12) showed the economy shrank by 20.4 per cent in the second quarter - that's the the largest contraction reported by any major economy so far.

In the first quarter, the economy contracted by a much smaller 2.2 per cent - reflecting the lockdown which started in March.

There are some signs of recovery, though.

Britain's Office for National Statistics said GDP grew by 8.7 per cent in the month of June alone.

And that's despite non-essential shops in England not reopening until mid June, with pubs and restaurants remaining shut until July.

June's rebound was just above economists' expectations - in a Reuters poll - for an 8 per cent rise.

The level of output in June, though, was almost 17 per cent below its level last year.

That compared with a 23 per cent fall in May.

Last week, the Bank of England said it didn't expect the UK economy to regain its previous size until the final quarter of next year.

And it warned unemployment was likely to rise much further.

According to tax data, employers have already shed more than 700,000 jobs since March.