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UK economy shrinks at fastest pace since financial crisis

Construction worker on site

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The UK economy shrank at the fastest pace since the financial crisis in the first quarter of 2020 as coronavirus forced the country into lockdown.

The Office for National Statistics said the economy contracted by 2% in the three months to March, following zero growth in the final quarter of 2019.

The decline was driven by a record fall in March, and reflects just one week of lockdown.

Analysts said the economy would suffer a bigger slump in the current quarter.

This is the first official growth estimate since the government introduced social distancing measures pat the end of March.

While analysts expected a larger quarterly decline of 2.6% in the first three months of the year, it is still the biggest contraction since the end of 2008, when Lehman Brothers collapsed.

The drop was driven by a record monthly fall of 5.8% in March alone, according to the ONS.

It said there had been “widespread” declines across the services, manufacturing and construction sectors, including a 1.9% fall in services output, which includes retailers, travel agents and hotels.

The ONS said: “This is the largest quarterly contraction since the global financial crisis and reflects the imposing of public health restrictions and voluntary social distancing put in place in response to the Covid-19 pandemic”.

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