- It was the country's largest drop since 1979, when the country was battling major industrial unrest and high unemployment.
- Gross domestic product fell by 2.2% in the first quarter, down 0.2 percentage points from the previous estimate of a 2% fall.
- Households curtailed their spending while other sectors like services, production, and construction all negatively impacted the overall economy leading to the slump in GDP.
- The Bank of England forecast earlier this year that UK GDP could drop more than 30% in the first half of 2020, as the pandemic hits output sharply.
- Visit Business Insider's homepage for more stories .
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The UK economy shrank more than it has done in over 40 years at the start of 2020 — and it could get 15 times worse
The UK economy declined by more than first expected in the first three months of the year, the Office for National Statistics showed on Tuesday.
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The UK economy shrank by its largest amount since 1979 in the first three months of 2020 as household consumption drastically reduced during the pandemic, according to data released Tuesday by the country's national statistics authority.
The country's gross domestic product for the first-quarter declined by 2.2%, down 0.2 percentage points from the Office for National Statistics' previous estimate of a 2% fall in output.
Private household consumption declined 2.9% in the first quarter. Similarly, services, production, and the construction sectors all contributed negatively to the GDP, the ONS said.
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Screenshot 2020 06 30 at 8.16.09 AM
ONS
Read more : Real-estate investor Joe Fairless breaks down how he went from 4 single-family rentals to overseeing 7,000 units worth $900 million and outlines the epiphany that turbocharged his career The last time the UK was this badly hit was in the third-quarter of 1979, under the early months of Margaret Thatcher's first government, when the economy declined by the same level of 2.2% driven by industrial strikes, high inflation, and severe unemployment. "The sharp fall in consumer spending at the end of March led to a notable increase in households' savings," Jonathan Athow, deputy national statistician of economic statistics at ONS said in a tweet . Household savings ratio which captures net savings as a percentage of disposable income rose to 8.6% in the first three months of the year, up from 6.6% in fourth-quarter 2019, data from ONS showed. The Bank of England has projected that the economy could shrink by 30% in the first half of the year, dependent on the duration of lockdown restrictions. While many parts of the country prepare to reopen in phases, Prime Minister Boris Johnson is already preparing to reimpose a lockdown on the city of Leicester where there is a resurgence of new coronavirus cases. Read more : We spoke with 3 financial experts, who said to make 4 these trades right now to get ahead of surprising gains when earnings season starts next month NOW WATCH: Here's what it's like to travel during the coronavirus outbreak See Also: ECB's Lagarde says the worst of the coronavirus crisis has likely passed, but recovery will be a 'complicated matter' Job losses are 4 times worse for the lowest-paid workers so far in the coronavirus pandemic, study shows Trump supports another round of stimulus checks, but Republicans are extremely split on sending more government cash to people SEE ALSO: The historically expensive S&P 500 could be seeing a loss of reopening optimism, Bank of America says
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