How the April fall in UK GDP is related to the pandemic response

YESTERDAY the growth figure for the UK’s GDP in April was published and showed a fall by 0. 3% after a fall of 0.1% in March. Immediately commentators (and social media in particular) rushed to abuse the government. Fair enough, that’s politics and so all the old hobby-horses were trotted out. 

It’s the “cost-of-living crisis and inflation”, it’s the “Ukraine War and its sanctions” – and not forgetting “it’s Brexit”.


These numbers are rarely simple and this occasion was no different. All but a few economists (such as Dr Gerard Lyons and Julian Jessop) had forgotten we have just been through a pandemic with its associated lockdowns, expensive furloughs, huge public spending that required Quantitative Easing (Bank of England money making) and the purchase of all sorts of healthcare equipment and the expansion of jobs and services across government – not least a huge increase in the NHS budget.

All that spending has had an impact on GDP over the past few years. It became part of the furniture. Put simply when the private sector was shut down the economy was running on fumes and primarily the activity of the public sector. Obviously the private sector has been picking up over the last ten months or so as the public sector interventions recede – so we are seeing a shift in the make up of our GDP as that transition happened and continues to happen.

As a Gerard Lyons Tweeted to point out, the significant difference year-on-year in April 2021 to 2022 was that Test & Trace – a huge and expensive activity of the Government – has fallen away and this resulted in a significant fall in GDP of 0.5%. Meanwhile there was “an improvement in wholesale and retail trade especially vehicles and a rebound in consumer facing services…” that partly offset this.

Gerard Lyons Tweeted to explain:

“Yesterday’s data leaves GDP 0.9% above its pre pandemic level. In the last three months GDP is still 0.2% higher than the previous three.” So it’s not all bad – although we would all like it to be better.

Why is this important?

Explaining the background is not to to absolve our government for making poor choices in the past or present – but simply to ensure we understand what is really happening. What the data tells us is that the pandemic response of the Government – be it right or wrong – has had a huge impact on our economy and as it shifts back to anything near normal there will be changes that we should not mistake for War, Brexit or inflation. (The April 2022 GDP figure also tells us that the economy was doing worse in 2020 and 2021 than most realised because it was exaggerated by the pandemic spending of the Government).

We need to encourage our politicians and commentators to be careful and more honest about data – the lockdowns and restrictions need to be seen for what they were – highly damaging to our livelihoods and thus to the societal support the country can provide. We need to place the blame for disruption where it is due. The fall in GDP is a consequence of the impacts of the pandemic and the country coming out of it. It’s rather like finding out just how much the waiting lists at the NHS have increased because people were not being treated – rather than arguing more people have suddenly become ill.

Until we attribute the correct causes for the outcomes we would wish to avoid we shall never recognise what are the right policies for the future. Lockdowns were a mistake in our recent past – they would be a huge mistake again if we ever fall for the scare stories that are bound to surface in the winter from all manner of health scares.

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Brian Monteith is a former member of the Scottish and European Parliaments and managing editor of the Recovery blog. 

Photo of Covid testing by Zstock from Adobe Stock