THE UK economy may be heading into double-dip recession after "sobering" data reveals a decline in gross domestic product – but the North-East businesspeople remain optimistic.

The Office for National Statistics figures, released today, January 15, reveal the UK economy shrank by 2.6 per cent in November as the country continues to grapple with Covid.

But chiefs at business organisation The Entrepreneurs’ Forum say North-East entrepreneurs remain optimistic about the year ahead as the vaccination rollout builds.

Chief executive Jonathan Lamb said: “There’s no doubt that trading conditions for many businesses are extremely tough and these latest statistics are sobering, but they reflect the effects the second national lockdown.

“It has tested the resilience of North-East entrepreneurs but despite that, and the challenges of the current lockdown, 2021 is still viewed as the year they get their businesses back on track."

The Northern Echo:

The November decline came after six consecutive months of growth, with a 0.6 per cent improvement in October.

Mr Lamb added: “The vaccination programme gives business leaders the confidence to look to a time when restrictions can be relaxed, and the economy once again opens up.

“Nobody knows exactly when that will be, but from our discussions, we know that entrepreneurs are planning for the future to take advantage of the many opportunities that will present themselves.”

The ONS noted the service sector was badly affected, with pubs and hairdressers taking the biggest hit.

It added that many businesses have adjusted to the new working conditions, which includes an increase in online presence together with improvement in some manufacturing and construction.

Mr Lamb said: “It is clear the current lockdown will have further consequences for the economy but businesses should not be deterred by one monthly economic snapshot.

“Patience is required as the rollout of Covid vaccines continue over the coming weeks and months."

James Smith, research director of think tank the Resolution Foundation, urges the Government "do everything it can".

He said: “The sharp GDP fall in November as England entered its second national lockdown suggests that the UK is in the midst of a double-dip recession as it starts the year with even stricter restrictions.

“But while the economic story today is of only the second-ever double-dip recession on record, the story of the year will be a vaccine-driven bounce back in economic activity for sectors like hospitality and leisure.

“The Chancellor must do everything he can to support that recovery once public health restrictions ease.”