Impact of 'lockdown' on the economy

The UK economy has shrunk by 20.4% due to the COVID-19 lockdown - more than any time on record. It makes the 'Great Recession' of 2008/9 look trivial. Was there a better was to tackle COVID-19? How do we get the economy back on its feet? 

The chart above shows the UK monthly GDP index since 1997 up to the present day. Prior to COVID-19, the last great ‘shock’ to the UK economy came with the ‘Great Recession’ following the global financial crisis of 2007/8. As the far right of the chart shows, the damage done to the economy by COVID-19 lockdown measures is far more extreme in both the magnitude and speed of the fall.

The contraction of 20.4% in April 2020 has been described as ‘unprecedented’ by the Office for National Statistics. In just two months of imposed lockdown measures, 18 years of economic growth has been wiped out.

A second quarter of negative economic growth will confirm that the UK is in recession. This seems almost inevitable, begging the question: could the UK’s response to the pandemic have been handled better?

Drastic steps will be required to get the economy back on its feet and recover from the damage.