The UK economy is entering a double-dip recession after the government announced a third lockdown in an attempt to contain the surge of Covid-19 cases across the country, US investment bank analysts Goldman Sachs said.

In a 7 January note, Goldman said it expected a 1.5% contraction in GDP in the first quarter of this year, although added that it would be smaller than the impact of the first lockdown in April but larger than the second one in November.