Britain’s economy shrank by a record 20.4 percent in April from March as the country spent the month in a tight COVID-19 lockdown, official data showed yesterday in what is likely to be the bottom of the crash before a long and slow recovery.
In a slump that dwarfed previous downturns in Britain’s recent history, the Office for National Statistics (ONS) also said the economy shrank by 24.5 percent compared with April last year.
Both readings were below the already unprecedentedly weak forecasts in a Reuters poll of economists.
Photo: EPA-EFE
“Record GDP falls in today’s figures. When taking April and March together the economy is 25% smaller. The economy in April the same size as it was in 2002,” ONS statistician Rob Kent-Smith wrote on Twitter.
The Bank of England (BOE) and the Office for Budget Responsibility have warned that Britain could be heading for its deepest recession in three centuries this year.
“In line with many other economies around the world, coronavirus is having a severe impact on our economy,” British Chancellor of the Exchequer Rishi Sunak said.
France’s economy is set for a 15 percent quarterly contraction in the April-to-June period, the Bank of France said on Thursday.
German industrial output fell by 17.9 percent in April from March, data showed this week.
However, the Organisation for Economic Co-operation and Development on Wednesday said that Britain was on course for the worst downturn among the countries it covers with the economy forecast to contract 11.5 percent this year.
Sunak said that government measures including a scheme to pay workers who are only temporarily laid off, alongside grants, loans and tax cuts for companies, meant that Britain had “the best chance of recovering quickly as the economy reopens.”
Next week much of Britain’s retail sector is due to reopen as long as shops follow social distancing rules.
Output in the dominant services sector fell by 19 percent in April from March while manufacturing was down more than 24 percent and construction crashed by nearly half.
In the three months to April, the overall economy contracted by 10.4 percent from the previous three-month period, also the biggest fall on record since the ONS began to publish monthly economic data in 1997.
“Given the lockdown started to be eased in May, April will mark the trough in GDP. So we are past the worst,” Capital Economics Ltd economist Andrew Wishart said.
“While the trough in activity is now behind us, the fiscal cost of the collapse and the rise in the unemployment rate to over 8 percent that will result are only just starting to emerge,” Wishart said.
BOE Governor Andrew Bailey on Wednesday said that he could see some signs of an economic recovery as the coronavirus lockdown restrictions were lifted, but he warned that there was still likely to be long-term economic damage.
The bank next week is expected to announce a further increase of at least £100 billion (US$126.15 billion) in its bond-buying firepower to try to stop the coronavirus crisis from inflicting further damage on Britain’s economy.
ASML Holding NV’s new advanced chip machines have a daunting price tag, said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), one of the Dutch company’s biggest clients. “The cost is very high,” TSMC senior vice president Kevin Zhang (張曉強) said at a technology symposium in Amsterdam on Tuesday, referring to ASML’s latest system known as high-NA extreme ultraviolet (EUV). “I like the high-NA EUV’s capability, but I don’t like the sticker price,” Zhang said. ASML’s new chip machine can imprint semiconductors with lines that are just 8 nanometers thick — 1.7 times smaller than the previous generation. The machines cost 350 million euros (US$378 million)
Apple Inc has closed in on an agreement with OpenAI to use the start-up’s technology on the iPhone, part of a broader push to bring artificial intelligence (AI) features to its devices, people familiar with the matter said. The two sides have been finalizing terms for a pact to use ChatGPT features in Apple’s iOS 18, the next iPhone operating system, said the people, who asked not to be identified because the situation is private. Apple also has held talks with Alphabet Inc’s Google about licensing its Gemini chatbot. Those discussions have not led to an agreement, but are ongoing. An OpenAI
INSATIABLE: Almost all AI innovators are working with the chipmaker to address the rapidly growing AI-related demand for energy-efficient computing power, the CEO said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported about 60 percent annual growth in revenue for last month, benefiting from rapidly growing demand for artificial intelligence (AI) and high-performance computing applications. Revenue last month expanded to NT$236.02 billion (US$7.28 billion), compared with NT$147.9 billion in April last year, the second-highest level in company history, TSMC said in a statement. On a monthly basis, revenue surged 20.9 percent, from NT$195.21 billion in March. As AI-related applications continue to show strong growth, TSMC expects revenue to expand about 27.6 percent year-on-year during the current quarter to between US$19.6 billion and US$20.4 billion. That would
‘FULL SUPPORT’: Kumamoto Governor Takashi Kimura said he hopes more companies would settle in the prefecture to create an area similar to Taiwan’s Hsinchu Science Park The newly elected governor of Japan’s Kumamoto Prefecture said he is ready to ensure wide-ranging support to woo Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to build its third Japanese chip factory there. Concerns of groundwater shortages when TSMC’s two plants begin operations in the prefecture’s Kikuyo have spurred discussions about the possibility of tapping unused dam water, Kumamoto Governor Takashi Kimura said in an interview on Saturday. While Kimura said talks about a third plant have yet to occur, Bloomberg had reported TSMC is already considering its third Japanese fab — also in Kumamoto — which would make more advanced chips. “We are