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UK economy officially in recession
The UK economy has shrunk by 20.4% between April and June, when the coronavirus lockdown was at its most severe. Experts say the downturn brought on by the pandemic led to the biggest fall in quarterly GDP on record.
The UK on Wednesday officially fell into recession for the first time in 11 years. The economy collapsed by a record 20.4% in the second quarter, compared to the first quarter, as a result of coronavirus lockdown measures imposed to contain the outbreak, agency reports said.
Between April and June, household spending plunged as businesses were ordered to shut down, while industries such as construction rolled back on output and production.
“The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record,” Jonathan Athow of the Office for National Statistics (ONS) said.
Data from the ONS showed that the UK economy had a 2.2% quarterly contraction in the first three months of the year.
The technical definition of a recession is two straight quarters of economic decline.
The economic decline was concentrated in April — the peak of lockdown.
The ONS said the economy bounced back in June as the government started to relax coronavirus restrictions.
Non-essential retailers in England, including clothes shops and bookshops, reopened their doors on June 15.
“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and house-building continuing to recover,” Athow said. But “Despite this, gross domestic product (GDP) in June still remains a sixth below its level in February, before the virus struck,” he added.
The UK’s service sector, which makes up four fifths of the economy, suffered the biggest quarterly decline on record. Car manufacturing, meanwhile, faced its slowest production rate since 1955.
Chancellor of the Exchequer Rishi Sunak warned that the economic slump would lead to further job losses in the coming months.
“Today’s figures confirm that hard times are here,” Sunak said. “Hundreds of thousands of people have already lost their jobs, and sadly, in the coming months many more will.”
Some 1.2 million employers have taken advantage of the government’s Coronavirus Job Retention Scheme to furlough 9.6 million people at a cost to the government of 33.8 billion pounds ($44 billion, €38 billion).
Sunak said he is ending the program in October because it gives “false hope” to furloughed workers and hinders them from getting new jobs as their skills decline.
The UK’s recession is deeper than those recorded by comparable countries such as the US and other European economies, notably Germany and France.
Germany’s governing coalition in June agreed on a €130 billion stimulus package to help pull the country’s economy out of recession. The government hoped the package would ease Germans’ financial strain and boost consumer spending.
In comparison to other European countries, Germany’s almost one month of lockdown was relatively short. But the German economy still went into recession in the first quarter of 2020.
Unemployment in May rose from 5.8% to 6.3%, figures which could have been higher if it were not for Germany’s “kurzarbeit” program, a wage subsidy scheme that allows struggling companies to decrease employees’ working hours instead of making them redundant.
News
Maldives Coast Guard Ship Huravee departs island
The Maldives Coast Guard Ship Huravee which arrived in Sri Lanka for replenishment purposes, departed the island on 04 Mar 26.
In accordance with naval tradition, the Sri Lanka Navy extended a customary farewell to the departing ship at the Port of Colombo
News
‘IRIS Dena was Indian Navy guest, hit without warning’, Iran warns US of bitter regret
A day after a US submarine sunk an Iranian Navy warship off the coast of Sri Lanka, the Foreign Minister of Iran, Sayed Abbas Araghchi, has warned that the US would “pay bitterly” for targeting a ship in international waters, The Tribune has reported.
Araghchi posted on social media platform X on Thursday saying, “The US has perpetrated an atrocity at sea, 2,000 miles away from Iran’s shores.”
The frigate IRIS Dena, a guest of India’s Navy carrying almost 130 sailors, was struck in international waters without warning, said the Iran Foreign Minister, adding, “Mark my words: The US will come to bitterly regret the precedent it has set.”
US Secretary of War, Pete Hegseth, on Wednesday confirmed that a US submarine fired a torpedo and sank the Iranian Navy vessel IRIS Dena west of Sri Lanka.
In a way, the Iran and US-Israel conflict has reached close to the Indian coast. The strike today at sea was almost 4,000 kms away from Iran, significantly expanding the radius of war. Already, fearing Iranian missile strikes, several US warships have moved eastward towards India.
These ships are in international waters. India has denied that any US Navy assets were using Indian ports. The Iranian ship, hit on Wednesday, was returning after participating in the international fleet review and exercise Milan hosted by India at Visakhapatnam.
The Iranian ship went down with almost 130 sailors on board missing. The Sri Lankan Navy, acting on a distress call, rescued 32 of the Iranian sailors. Hegseth confirmed the act by the US forces, saying the ship was hit in the Indian Ocean, stating, “an Iranian warship that thought it was safe in international waters. .. Instead, it was sunk by a torpedo”.
Hegseth did not name the Iranian ship that was attacked. But earlier, the Sri Lankan Navy reported the distress call from IRIS Dena when it was some 40 kms west of Galle, located on the south-western part of the island country. On February 16, the Iranian ship had sailed into the port of Visakhapatnam, where seventy-four nations participated.
Warships from Australia, Japan, South Korea, Russia, and dozens of others were anchored alongside the now-sunk Iranian vessel. Iran’s Navy Commander, Rear Admiral Shahram Irani, held talks with India’s Chief of Naval Staff on strengthening maritime security cooperation.
The theme was “United through Oceans.” Notably, the US Navy was supposed to send the guided-missile destroyer USS Pinckney to the exercise Milan; however, the ship was diverted to Singapore on February 15. The US did not field its warship in Milan, which had ships from Russia and Iran.
The exercise ended on February 25. Three days later, on February 28, the United States and Israel launched Operation Epic Fury. The IRIS Dena was transiting home. This morning at 5:08 a.m. local time, the IRIS Dena issued a distress call. Sri Lanka’s Foreign Minister, Vijitha Herath, informed parliament that two navy vessels and an aircraft were deployed. Thirty crew members were rescued and admitted to Karapitiya Hospital in Galle.
The Straits Times reported 32 critically wounded survivors. Reuters reported 101 missing and 78 wounded. The Sri Lankan Navy spokesman said the operation was conducted in line with the International Convention on Maritime Search and Rescue.
News
Risk of power cuts due to use of low-quality coal,PUCSL warns
The Public Utilities Commission of Sri Lanka (PUCSL) has warned of a possible risk of power cuts due to the use of inferior quality coal affecting generation capacity at the Lakvijaya Power Plant, according to a recent commission report.
The commission said the risk to the continuous electricity supply was assessed based on the peak demand forecast submitted by the Ceylon Electricity Board (CEB) for 2026.
According to the report, the analysis assumed that hydropower plants could contribute up to 1,300 MW to meet the night peak demand, while the Lakvijaya Power Plant (LVPS) would be able to contribute only up to 690 MW due to a capacity shortfall, assuming a 40 MW generation capacity reduction from each unit.
The PUCSL said the assessment was carried out taking into account the planned maintenance schedule submitted by the CEB. Under the schedule, Unit 1 of the Lakvijaya plant is due to undergo maintenance checks and repairs in June for a period of 25 days, while Unit 2 is scheduled for maintenance in July for another 25 days.
The report also noted that the 270 MW West Coast Power Plant is scheduled to undergo maintenance in April for 10 days, while the 150 MW Kelanitissa Combined Cycle Power Plant (KCCP 2) is expected to undergo maintenance during May, June and July.
Under normal conditions, the report said, there is a potential risk of a generation capacity shortage if electricity demand reaches 3,030 MW in April, 3,070 MW in June and 3,000 MW in July.
The highest recorded night peak demand so far in 2026 was 2,949 MW on February 25.
The PUCSL further warned that if one coal unit or any major power plant becomes unavailable from the existing generation mix, there would be a significant risk of a generation capacity shortage to meet the night peak demand, particularly during April, June and July.
Energy sector analysts said the use of substandard coal could further aggravate operational challenges at the Norochcholai plant, potentially affecting generation efficiency and reliability if corrective measures are not taken promptly.
By Ifham Nizam
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