Britain suffered a record decline in economic output in the second quarter of this year, suffering a contraction of almost 20 per cent when lockdown measures were at their peak, according to new government data.
Gross domestic product fell 19.8 per cent in the three months to June, compared with the previous quarterly decline of 2.5 per cent – the biggest drop since Office for National Statistics data began in 1955 and the largest contraction for any major advanced economy.
“The Quarterly National Accounts showed that the bulk of the pain of Q2’s slump in GDP was borne by the government rather than households and businesses. But with the recovery already flattening off, fiscal support fading and the full scale of the fallout in unemployment yet to be felt, that will change in the second half of 2020,” said Ruth Gregory, a senior UK economist at Capital Economics.
Britain's economy has shrunk by about a fifth in the first half of this year, far bigger than any previous contraction on record, according to the ONS. The British government borrowed a record £35.9 billion ($46.01bn) in August - £30.5bn more than the government borrowed in the same month last year – as it tried to bolster the economy amid the crisis, with fears the deficit could hit £372bn by the end of the tax year.
Last week, chancellor of the exchequer Rishi Sunak set out the government's new support scheme to save millions of jobs and businesses from a winter crisis as the number of new Covid-19 cases soared to new highs. The new jobs initiative will replace the existing furlough scheme, which has cost the government £39.3bn as of September 20.
The UK economy saw record quarterly falls in sectors that were most exposed to government restrictions, with services output contracting 19.2 per cent, production output falling 16.3 per cent and construction output decreasing 35.7 per cent.
While the second quarter saw a record drop in household consumption of 23.6 per cent, real household disposable income fell by 2.3 per cent quarter-on-quarter, when adjusted for inflation, as government wage subsidies for furloughed workers meant many British households experienced only a small salary hit.
As a result, households ended up saving 29.1 per cent of their income as shutdown measures restricted the ability to spend in shops, restaurants and on public transport. The amount saved rose to almost £104bn, triple that in the previous quarter.
On the corporate side, the profits of non-financial businesses sank by 9.6 per cent quarter-on-quarter, "far smaller than it would have been if the government had not taken the responsibility for paying the wages of furloughed employees and deferred some scheduled tax payments" said Ms Gregory. “But with fiscal support easing and unemployment rising, the government is now handing back the burden to households and businesses.”
While indicators that cash involuntarily built up during the lockdown helped drive a strong recovery in the third quarter, how quickly the economy continues to grow will depend on whether consumers maintain their spending or insist on holding precautionary savings as the economic outlook darkens.
Unemployment is set to soar as wage support is scaled back, after hitting 4.1 per cent in the second quarter of the year. Analysts expect jobless rates to peak at 8.9 per cent in the fourth quarter, before dropping back again in 2021 as the UK economy recovers from the crisis.
However, with movement curbs being re-imposed amid a resurgence of coronavirus cases, and the risk of a disruptive Brexit growing amid troubled trade talks between Britain and the European Union, the economic picture may deteriorate further.
“What matters the most is … how will the economy face the fresh challenges of new restrictive measures,” said Naeem Aslam, chief market strategist at London’s Avatrade.
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Attacks on Egypt’s long rooted Copts
Egypt’s Copts belong to one of the world’s oldest Christian communities, with Mark the Evangelist credited with founding their church around 300 AD. Orthodox Christians account for the overwhelming majority of Christians in Egypt, with the rest mainly made up of Greek Orthodox, Catholics and Anglicans.
The community accounts for some 10 per cent of Egypt’s 100 million people, with the largest concentrations of Christians found in Cairo, Alexandria and the provinces of Minya and Assiut south of Cairo.
Egypt’s Christians have had a somewhat turbulent history in the Muslim majority Arab nation, with the community occasionally suffering outright persecution but generally living in peace with their Muslim compatriots. But radical Muslims who have first emerged in the 1970s have whipped up anti-Christian sentiments, something that has, in turn, led to an upsurge in attacks against their places of worship, church-linked facilities as well as their businesses and homes.
More recently, ISIS has vowed to go after the Christians, claiming responsibility for a series of attacks against churches packed with worshippers starting December 2016.
The discrimination many Christians complain about and the shift towards religious conservatism by many Egyptian Muslims over the last 50 years have forced hundreds of thousands of Christians to migrate, starting new lives in growing communities in places as far afield as Australia, Canada and the United States.
Here is a look at major attacks against Egypt's Coptic Christians in recent years:
November 2: Masked gunmen riding pickup trucks opened fire on three buses carrying pilgrims to the remote desert monastery of St. Samuel the Confessor south of Cairo, killing 7 and wounding about 20. IS claimed responsibility for the attack.
May 26, 2017: Masked militants riding in three all-terrain cars open fire on a bus carrying pilgrims on their way to the Monastery of St. Samuel the Confessor, killing 29 and wounding 22. ISIS claimed responsibility for the attack.
April 2017: Twin attacks by suicide bombers hit churches in the coastal city of Alexandria and the Nile Delta city of Tanta. At least 43 people are killed and scores of worshippers injured in the Palm Sunday attack, which narrowly missed a ceremony presided over by Pope Tawadros II, spiritual leader of Egypt Orthodox Copts, in Alexandria's St. Mark's Cathedral. ISIS claimed responsibility for the attacks.
February 2017: Hundreds of Egyptian Christians flee their homes in the northern part of the Sinai Peninsula, fearing attacks by ISIS. The group's North Sinai affiliate had killed at least seven Coptic Christians in the restive peninsula in less than a month.
December 2016: A bombing at a chapel adjacent to Egypt's main Coptic Christian cathedral in Cairo kills 30 people and wounds dozens during Sunday Mass in one of the deadliest attacks carried out against the religious minority in recent memory. ISIS claimed responsibility.
July 2016: Pope Tawadros II says that since 2013 there were 37 sectarian attacks on Christians in Egypt, nearly one incident a month. A Muslim mob stabs to death a 27-year-old Coptic Christian man, Fam Khalaf, in the central city of Minya over a personal feud.
May 2016: A Muslim mob ransacks and torches seven Christian homes in Minya after rumours spread that a Christian man had an affair with a Muslim woman. The elderly mother of the Christian man was stripped naked and dragged through a street by the mob.
New Year's Eve 2011: A bomb explodes in a Coptic Christian church in Alexandria as worshippers leave after a midnight mass, killing more than 20 people.
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