From January to March 2020, the UK's GDP contracted 2.0% from the last three months of 2019, the Office for National Statistics said.
That was the largest quarter-on-quarter fall since the end of 2008, when the financial crisis hit its peak.
According to Chancellor of the Exchequer Rishi Sunak, the figures are not surprising as the country is facing a "severe impact" from the ongoing pandemic.
GDP fell 5.8% in March; services (-6.2%) and construction (-5.9%) both saw record monthly falls, while manufacturing also fell 4.6% https://t.co/MEDDRForLF pic.twitter.com/7Lap3dyeXv
— Office for National Statistics (ONS) (@ONS) May 13, 2020
Following the news, UK stock markets fell, with the blue-chip FTSE 100 index being down 1%, snapping a five-day winning streak and wiping out most of the gains it made this month.
The mid-cap FTSE 250 also shed 1%, with travel stocks plummeting again after a warning from TUI about thousands of job cuts.
Earlier, the Bank of England said it expected the country's GDP to see a 14 percent decrease in 2020 and then grow by 15 percent in 2021.
"UK GDP in the scenario falls by 14% in 2020 as a whole. Activity picks up materially in the latter part of 2020 and into 2021 after social distancing measures are relaxed, although it does not reach its pre‐COVID level until the second half of 2021. In 2022, GDP growth is around 3%", the Monetary Policy Report said.
UK Prime Minister Boris Johnson on Sunday announced that the government was planning to relax Covid-19 restrictions put into place in mid-March.
