Like many countries, the United Kingdom has been hit hard by the outbreak of COVID-19 and the measures taken to contain the pandemic have triggered the most severe fall in output since the 1920s (Figure 1.1). As the public health situation improves, the economic consequences will come to the fore. While some activities are picking up as restrictions ease, overall demand is expected to recover only gradually and unemployment will increase and remain high for some time. The service sectors, particularly those involving face-to-face interactions, bore the brunt of the COVID-19 shock, affecting many lower-skilled and more vulnerable workers. A rapid and massive emergency policy response, including extra funding to the health system and massive support to workers and firms, helped steady the economy. Policies moved to a second phase since July with the Plan for Jobs and the Winter Economic Plan, winding down some emergency measures, extending some support and introducing new measures focused on buttressing demand and jobs. A sustained and strong recovery will depend heavily on the resilience of the economy and the effectiveness of Testing, Tracking and Tracing (TTT) measures to limit the spread of the virus until a vaccine or an effective treatment are available. Fostering productivity growth in the service sectors, which has been flat-lining since the financial crisis and is lagging behind its main trading partners, will be key to support a long-lasting and sustainable recovery and deliver prosperity for all.