BRITAIN’s economy is expected to drop back into recession after official figures showed yesterday that it had shrunk as a result of stricter coronavirus restrictions being imposed towards the end of last year.

The Office for National Statistics said that gross domestic product (GDP) had declined by 2.6 per cent month on month in November.

GDP at the end of November, when England was in its second lockdown, was 8.5 per cent below the pre-pandemic peak.

That month’s decline followed six consecutive months of growth, including a 0.6 per cent improvement in October.

The economy is expected to drop back into a recession after a third lockdown took hold this month.

Economists had warned of a double-dip recession – which would be only the second ever recorded – if coronavirus restrictions remain in place until the end of March.

The dip was driven by the services sector, which shrank by 3.4 per cent in November as many hospitality and leisure firms were forced to shut due to England’s second lockdown and strict restrictions across the other nations of the UK.

The sector is now 9.9 per cent smaller than it was in February 2020, before the impact of the pandemic first made itself felt.

In response to the GDP figures, Labour’s shadow chancellor Anneliese Dodds said that her Tory counterpart Rishi Sunak must secure the incomes of people hardest hit by the restrictions by abandoning planned cuts.

She said: “The UK has already had the worst recession of any major economy and now we’re in danger of a devastating double dip.

“That’s the cost of this Conservative government’s incompetence and indecision. 

“Instead of securing our economy, the Chancellor is winding down economic support and hitting families with a triple hammer blow of pay freezes, a cut to universal credit and a hike in council tax.”

TUC general secretary Frances O’Grady said that the government “must go all out” to protect the capacity of the economy, protect incomes and jobs by extending furlough to the end of the year, and to “quickly rebuild as vaccination provides a path to recovery.”

She added: “And the Chancellor should confirm major investment in the Budget to create jobs in green industry and unlock vacancies in understaffed services like the NHS and social care.”