Commenting on GDP figures for Q2 2020 published today by the ONS, BCC Head of Economics Suren Thiru said:
“The UK suffered an historic contraction in economic activity in the second quarter as the coronavirus closed large parts of the economy. The dominant services sector suffered particularly badly in the quarter, with consumer-focused firms hit hardest by the pandemic.
“While there was a pick-up in activity through the quarter from the historically weak April outturn, this is more likely to reflect the release of pent-up demand as the economy gradually opened, rather than an indication of a sustained revival.
“With restrictions steadily easing, the second quarter is likely to prove to be the low point for the UK economy. However, the prospect of a swift ‘V-shaped’ recovery remains remote as the recent gains in output may fade over the coming months as the economic damage caused by the pandemic increasingly weighs on activity, particularly as the government support measures wind down.
“Against this backdrop, bold action is needed to immediately inject confidence back into the UK economy. This should include supporting businesses to retain staff through a cut in employer national insurance contributions and targeted support to help businesses placed under local lockdowns.”