The U.K. economy is in a technical recession after the second quarter of 2020 (April to June) saw a record Gross Domestic Product (GDP) fall of 20.4%, following a “significant shock since the start of the coronavirus pandemic,” according to figures released by the Office of National Statistics (ONS) on Wednesday.
This follows a fall of 2.2% during the first quarter of 2020.
This is the first U.K. recession since the global financial crisis of 2008. ONS statistics show that the second quarter of 2020 is now 22.1% below the fourth quarter of 2019, which is more than three times greater than the total fall during the next largest recession period, which occurred during the global economic downturn of 2008 to 2009.
“It is clear, that the U.K. is in the largest recession on record,” said an ONS statement. “Our latest estimates show that the U.K. economy is now 17.2% smaller than it was in February 2020, the effects of which have been most pronounced in those industries that have been most exposed to public health restrictions and the effects of social distancing.”
While the precise effects of the recession on the media and entertainment industry are yet to be analyzed, it could have a significant knock-on impact on the sector. Recent months have shown how vulnerable cinemas, theaters and productions are to public health restrictions and the effects of social distancing.
However, it’s not all doom and gloom for the economy. Though it remained 17.2% below February levels, monthly GDP rose by 8.7% during June 2020.
“The economy began to bounce back in June, with shops reopening, factories beginning to ramp up production and house-building continuing to recover,” said Jonathan Athow, deputy national statistician for economic statistics at ONS, which also reports that businesses are increasing output as demand has increased following the easing of social distancing and lockdown measures.
“There was also an increase in information and communication; professional services; administrative and support services; and arts, entertainment and recreation sectors after these experienced falls in May 2020,” said ONS.
U.K. cinemas are reopening in stages with “Unhinged” leading the box office, despite an ongoing heat wave, while tickets have gone on sale for hotly anticipated summer title “Tenet.” Meanwhile, the theater industry is likely to slowly reopen from September and the film and television production sector is also restarting in stages.