UK economy to contract by 8% this year, says EY Item Club

Factories ‘need shot in arm’ after output slumps
A ­substantial rise in joblessness is expected when ­official figures for April are published
A ­substantial rise in joblessness is expected when ­official figures for April are published
KIRSTY O'CONNOR/PA

Britain’s economy will shrink by 8 per cent this year but it should rebound faster than initially expected, according to the EY Item Club.

After official figures released last week showed that the economy shrank at its fastest pace on record in April, the forecasting body downgraded its predictions for the year from a previous estimate of a 6.8 per cent contraction.

It said that “the gloomier forecast figures reflect a poor economic performance in April due to the lockdown and deeper than expected contraction in quarter one”. The economy shrank by 20.4 per cent in April, the first full month of lockdown. The contraction was by far the sharpest on record and almost four times as large as the 5.8 per cent drop