The UK economy shrank 5.8% in March, the fastest drop in history — and it's only going to get worse

• The UK's economy shrank at the fastest rate since the 2008 financial crisis in the first three months of 2020, the Office for National Statistics said Wednesday.
• In March alone, gross domestic product fell by 5.8%, the biggest single month since comparable records began/
• "It is a sledgehammer," said Connor Campbell, a financial analyst.
• "However, that is almost purely down to when lockdown was implemented rather than any actual outperformance, meaning even more pain is going to be felt in Q2."
• Visit Business Insider's homepage for more stories.

UK's economy shrank at the fastest pace since the global financial crisis in the first quarter of 2020, according to data released Wednesday by the country's statistics authority.

The Office for National Statistics (ONS) said UK's gross domestic product fell by about 2% in the first quarter, followed by flat GDP in the fourth quarter of 2019.

The sizeable decline reflects the sharp 5.8% fall in March, when the UK went into lockdown which led to dips in output across the services, production, and construction industries. That was the fastest monthly drop since the ONS started recording monthly data over 20 years ago.

"This is the largest quarterly contraction in the UK economy since the 2008 global financial crisis and reflects the imposing of public health restrictions and voluntary social distancing put in place in response to the COVID-19 pandemic," the ONS said in a statement.

Read More: MORGAN STANLEY: Buy these 20 stocks built to profit from a mounting inflation comeback that will alter the investing landscape

While the ONS advised against putting too much weight on just one month's data, it said the figures were helpful in understanding the broader picture.

Elsewhere in Europe, the eurozone economy contracted by 3.8% in the first quarter according to data released at the end of April. France and Spain shrank by 5.8% and 5.2% respectively in the same period.

Analysts, however, were astonished by UK's data as they expected a larger decline of between 2.5% to 3% in the first three months of the year, and a 7.9% collapse for March in particular. They expect an even bigger slump in the second quarter.

"That actually means the UK avoided the kind of Q1 contraction seen by its peers – France fell 5.8%, Italy 4.7% and Spain 5.2%," said Connor Campbell, a financial analyst at SpreadEx, while he noted the UK's contraction was a "sledgehammer."

"That is almost purely down to when lockdown was implemented rather than any actual outperformance, meaning even more pain is going to be felt in Q2," Campbell said.

Read More: Bill Miller's record-setting fund beat the market for 15 straight years. He explains why he's still bullish on airlines, even after Warren Buffett abandoned the industry twice.