The U.K. economy shrank less than its peers in the first quarter of the year as the coronavirus pandemic swept across the globe, reflecting the country’s decision to hold off locking down its economy until the end of March.
The economy shrank an annualized 7.7% on the quarter in January through March, a smaller contraction than its big European neighbors. France’s economy shrank 21% during the same period. Spain’s economy shrank 19% and Italy’s 17%.
However, the U.K. didn’t lock down its economy until March 23. That means the worst of the economic hit is still to come. The Bank of England expects the economy to contract by a quarter in the second three months of the year.
The first-quarter fall in U.K. output was the largest since the third quarter of 2008, when the country was reeling from the global financial crisis. The services sector was the biggest drag on growth, figures show. On a spending basis, data show household and government spending fell on the quarter and exports plunged as the pandemic ripped into global trade.