Today's GDP figures revealing the UK’s output shrank by more than 20% in Q2 shows "the heavy price the UK has paid" for being slower than its European peers to enter a lockdown, according to several investment professionals, who have said that while the figures are "spectacular", they are unsurprising.
Figures from the Office for National Statistics (ONS) released today (12 August) found the UK is in the throes of its "largest recession on record" after growth shrank by 20.4% between Q1 and Q2 this year.
Combined with a 2.2% reduction in output between Q4 2019 and Q1 2020, the economy is now more than a fifth smaller than it was at the start of the year.
In June, however, GDP saw an uptick of 8.7%, according to ONS data, following the phased reopening of businesses including non-essential shops, pubs and restaurants.
Jon Hudson, UK equities investment manager at Premier Miton, said June's bounce compared to May's figures shows the "recovery has already begun", but that health of the economy is trailing the dust of its European peers.
"Having underperformed all our European neighbours, today's GDP figures show the heavy price the UK has paid for being slower to enter a lockdown," he said.
Adam Vettese, analyst at eToro, agreed with Hudson that investors can "take heart in the fact" the economy bounced back in June as lockdown eased and people returned to work.
"The UK's fall into recession feels like the longest movie spoiler in history, with the Bank of England predicting a more than 20% fall in output a week ago," he pointed out.
"On a brighter note - if you can call it that - the slump was marginally better than predicted and, for now at least, the furlough scheme is keeping a cap on job losses.
"But clearly the road to recovery will be long and possibly painful at times. It will take months and perhaps even years, rather than weeks, before the economic scars from this pandemic heal."
Helal Miah, investment research analyst at The Share Centre, said June's GDP growth should not be surprising as "any bounce off such great troughs will look impressive on a standalone basis".
"The wider picture is that the UK output fell by 20.4% over the second quarter; we always knew this would be the worst figure on record and puts the GDP falls during the financial crisis into insignificance," he said.
"In assessing against other countries it shows just how badly the UK has handled the crisis, both medically and economically.
"We were late to introduce lockdowns for the sake of the economy, but by not taking action early enough we did far more damage to the economy without saving lives we could have."
He added that the UK's 20.4% GDP fall was twice as bad as those seen across major European countries and the US and that, alongside the UK Government's poor handling of the pandemic, the economy was likely bruised by its heavy reliance on services and the hospitality sector, which faced tougher lockdown measures than many other market areas.