Was the Impact of COVID on UK GDP Real or Statistical?

Colin Ellis

Published: December 2021

The COVID-19 pandemic, and measures to fight it such as lockdowns, took a significant toll on economic activity around the world. In many instances, declines in GDP were the steepest on record, with the UK standing out among advanced economies. However, the extent of the downturn reflected not just the impact of the pandemic, but also the way that economic activity is measured. In particular, different countries adopt different approaches to measuring real government spending and output, and those differences had a significant impact during the pandemic. This article describes those broad differences in approach, and illustrates what UK activity estimates could have looked like if ONS estimates had followed the approach used for other European economies. Far from being the hardest hit of the five major European economies, the UK would actually have fared better than most under alternative measurement practices for GDP. This highlights the importance of how statistics are calculated, particularly for important economic data series, and cautions against just taking them as given.