The UK economy context:

In the aftermath of the global pandemic better known as Covid-19, all the world’s economies are finding themselves assessing the consequences on the economic system.

In this particular case, the UK economy is contracting in nominal terms and beyond.

The lockdown, or freezing of almost all activity in the country, began on March 23rd but, for a fortnight, there had already been a reduction in the flow of people on public transport and the cancellation of many jobs.

Data:

The UK’s Treasury and Economy Ministry has published data for the first quarter and it shows :

GDP contraction of 2 %, the largest recorded in the last decade;

consumption contraction of 1.7%.

Compared to the rest of the world, these figures place the UK among the countries that have suffered the smallest contraction in GDP so far, especially when compared to the Eurozone, which recorded a 3.8 per cent contraction in GDP.

Added to this is the fact that the Eurozone countries imposed the lockdown, on different dates.

The government’s response to the lockdown of the economy caused by Covid-19 was not slow in coming. Indeed, it has responded with various interventions and above all with an initial economic manoeuvre of GBP 350 billion to support the economy.

These responses were financed by the Bank of England and the placement of government bonds on the market, offering an interest rate of 0.6%, given that demand was three times greater than supply at the time of placement.

Fundamental is the role of the Bank of England, which acts as guarantor for loans granted to medium and large enterprises.

While for small businesses, the banks provide funding that is 80 % guaranteed by the government, with the remaining 20 % prohibited by law from requiring further guarantees.

News :

Specifically, the London property market has suffered a setback, although according to a report in the London Evening Standard, according to data published by the Land Registry, prices in the city of London have recorded an overall increase of 4.7 % compared to the same period last year. Certain areas of the city, on the other hand, experienced much larger increases.

For example, the Borough of Kensington and Chelsea recorded a price increase of 14.6%, the Borough of Westminster recorded an increase of 13.5%.

The consequences of Covid-19 are yet to be fully deciphered and implemented in the real economy. However, to date it can be said that the UK has responded in a timely manner with action to support the economy.

We will see what the impact will be on other countries’ economies and what their recovery rates will be.

A final piece of news worth noting is that the Japanese car manufacturer Nissan has announced plans to shift production from Spain to the UK.

All economic data for the first quarter can be found at: https://www.ons.gov.uk/economy/