World beating? UK is worst hit major economy now 21.8% smaller than late 2021

Credit;PA

No nations have come using this pandemic without a major hit for their economy, it's strained the finances of every country on the planet. However, with regards to the world’s major economies the UK has not faired at all well.

The UK economy's record contraction within the second quarter was slightly less severe than first thought, however the 19.8% plunge still saw Britain suffer the worst slump of any major economy.

The Office for National Statistics (ONS) revised the second quarter figure from an earlier estimate of 20.4%, while updated figures also showed a steeper contraction of 2.5% between January and March.

It previously estimated that GDP fell 2.2% within the first quarter.

Despite the revisions, the UK still tumbled into the largest recession since current records began and fared worse in the second quarter than any of its advanced economic counterparts.

The ONS said: “While it's still correct that these early estimates are susceptible to revision, we prefer to focus on the magnitude from the contraction that has taken place in reaction to the coronavirus pandemic.

Largest recession on record

“It is clear that the UK is in the largest recession on record.

“The latest estimates reveal that the united kingdom economy has become 21.8% small compared to it had been after 2021, highlighting the unprecedented size this contraction.”

Since the nadir of the recession in April, GDP has now grown for 3 months consecutively, but only has made up around 1 / 2 of the ground lost throughout the pandemic, based on the ONS.

The lockdown saw a record-breaking 23.6% fall in household spending between April and June, which economist Samuel Tombs at Pantheon Macroeconomics said was “at the main of the UK's underperformance”.

Forced to stay at home during the lockdown, Britons ramped up their savings instead of spending – sending your family saving ratio soaring to an all-time high of 29.1% in the second quarter.

Saving ratio

This was up in the 9.6% saving ratio in the first 3 months of the year, according to the ONS.

Mr Tombs said: “Households' spending have rebounded strongly within the third quarter, as they spent a few of the 'enforced' savings they accumulated in Q2.”

But he added: “The still-low degree of consumers' confidence, that has been weighed down by rising redundancies and also the emerging second wave of Covid-19, suggests that households' saving rate will return in the fourth quarter to some level much higher than seen prior to the virus struck.”