Retail Sales Slump as Economic Recovery Shows Signs of Stalling: Live Updates

Britain’s economy declined in November, the earliest signal that the country might be heading for its second round of contraction within months — a double-dip recession — because of the severity of the second wave of the pandemic and the restrictions that have been imposed on businesses and the population.

Gross domestic product dropped 2.6 percent in November, when a second lockdown was imposed across England, after six consecutive months of economic growth, according to the Office for National Statistics.

That said, the impact of this second lockdown was much less economically severe than the closures last spring, when the economy fell by more than 18 percent. The difference this time was, in part, because the restrictions were looser and more businesses had adapted: schools remained open, more people could go to their workplaces and many retail and hospitality businesses had added delivery and pickup services. The construction and manufacturing sectors of the economy were the only ones that grew in November, but the overall decline was smaller than most economists had forecast.

Still, the economic recovery that many thought would come once vaccinations began has been postponed, at least until the spring. Much of Britain is under a third lockdown (longer and stricter than the second), as a more contagious variant of the virus has strained the health care system, and economists are forecasting the economy to contract in the first quarter of 2021.

Trade disruptions created by Britain’s exit from the European Union’s single market and customs union, including delays, lost business, and the halting of some services, is also expected to weigh on the economy in the first few months of the year.

“We should expect the economy to get worse before it gets better,” Rishi Sunak, the chancellor of the Exchequer, said in Parliament on Monday. The next day, Andrew Bailey, the governor of the central bank, said the economy was facing its “darkest hour” and that it was in “a very difficult period.”

— Eshe Nelson

Article source: https://www.nytimes.com/live/2021/01/15/business/us-economy-coronavirus/