List of recessions in the United Kingdom

Last updated

This is a list of recessions (and depressions) that have affected the economy of the United Kingdom and its predecessor states. In the United Kingdom a recession is generally defined as two successive quarters of negative economic growth, as measured by the seasonally adjusted quarter-on-quarter figures for real GDP. [1] [2]

Contents

NameDatesDurationReal GDP reductionCausesOther data
Great Slump c. 1430 – c. 1490c. 60 yearsEconomic blockades during the Hundred Years' War and the Great Bullion Famine
War of the Spanish Succession 1706−15% [3] War of the Spanish Succession compounded by failure of harvest
The Great Frost 17093 months [4] −14% [3] Failure of harvest caused by the Great Frost
Crisis of 1772 1772 Great Bengal famine of 1770
Post-Napoleonic depression 1812–1821c. 9 years [5] Post-Napoleonic Wars readjustment
1857–58 recession1857–58c. 1 year [6] [7] c. 1% [8] Panic of 1857 (originating in America) as the first global economic crisis, confidence eroded by Palmerston government relaxing the provisions of the Bank Charter Act 1844 Comparatively brief contraction of approximately 3.5% [6] nominal GDP?
1867–1869 recession1867–1869c. 2 years [6] [7] c. 1% [9] Impact on exports resulting from American recession post-American Civil War 1.9% [6] fall in GDP
Long Depression 1873–1896Periodic falls in real GDP over c. 20 yearsDeflation but a large rise real GDP Panic of 1873 Previously known as the "Great Depression". Real GDP rose over this period. Agricultural deflation hit farmers and their workers, although industrial output continued to grow.
1919–1926 depression 1919–1921c. 3 years
  • 1919 −10.9%
  • 1920 – 6.0%
  • 1921 – 8.1% [10]
  • 9.5% [11]
The end of World War I Deflation c. 10% in 1921, and c. 14% in 1922. [12]
Great Depression 1930–31c. 2 years
  • 1930: −0.7%
  • 1931: −5.1% [10]
US Depression. Reducing demand for UK exports, also high interest rate defending the gold standard.UK came off gold standard September 1931. 3–5% deflation pa. UK much less affected than US. Took 16 quarters for GDP to recover to that at start of recession [13] after a 'double dip'.
1956 recession1956 Q2
1956 Q3		0.5 years
(2 Qtrs) [14]
  • 1956 Q2: −0.2%
  • 1956 Q3: −0.1%
Uncompetitive motor industry, [15] inflationary pressures, credit squeeze caused by high bank rate, effects of the Suez crisis – oil embargo by NATO and other Arab countries. [16] Average inflation in 1956 totalled 4.9%.[ citation needed ] Interest rate held at 5.5%, an increase of 1.0% on the previous year.[ citation needed ]
1961 recession
  • 1961 Q3
  • 1961 Q4
0.5 years
(2 Qtrs) [14]
  • 1961 Q3: −0.5%
  • 1961 Q4: −0.2%
Time lag from the 'Rolling Adjustment' recession in America [17] and high bank rate.Interest rates were hiked from 5.0% to 7.0% in July 1961, reducing to 6.5% in October 1961 and then to 6.0% from November 1961 onwards.[ citation needed ]
Mid-1970s recessions
  • 1973 Q3
  • 1973 Q4
  • 1974 Q1
0.75 years
(3 Qtrs) [14]
  • 1973 Q3: −1.0%
  • 1973 Q4: −0.4%
  • 1974 Q1: −2.7%
 1973 oil crisis, stagflation, the decline of traditional British industries, inefficient production, high inflation caused industrial disputes over pay.The economy surpassed its pre-recession peak by 1976 Q4, fourteen quarters after its beginning. [12] [13] There were two single-quarterly setbacks during the recovery (aside from the double-dip) in 1974 Q4 and 1976 Q2. Average inflation was 9.2% in 1973, 16.0% in 1974, 24.2% in 1975 and 16.5% in 1976.[ citation needed ] Interest rates fluctuated wildly during the recession with a low of 9.0% in March 1976 and a high of 15.0% in October 1976.
  • 1975 Q2
  • 1975 Q3
0.5 years
(2 Qtrs) [14]
  • 1975 Q2: −1.7%
  • 1975 Q3: −0.3%
Early 1980s recession
  • 1980 Q1
  • 1980 Q2
  • 1980 Q3
  • 1980 Q4
  • 1981 Q1
1.25 years
(5 Qtr) [14]
  • 1980 Q1: −1.7%
  • 1980 Q2: −2.0%
  • 1980 Q3: −0.2%
  • 1980 Q4: −1.0%
  • 1981 Q1: −0.3%
Deflationary government policies including spending cuts, pursuance of monetarism to reduce inflation, switch from a manufacturing economy to a services economy.Company earnings decline 35%. Unemployment rises from 5.3% of the working population in August 1979 to 11.9% in 1984. [18] Took thirteen quarters for GDP to recover to its pre-recession peak at the end of 1979. [12] Annual inflation was 18.0% in 1980, 11.9% in 1981, 8.6% in 1982 and 4.6% in 1983.[ citation needed ] Interest rates generally declined during the recession from a peak of 17.0% at the beginning of 1980 to a low of 9.6% in October 1982.[ citation needed ]
Early 1990s recession
  • 1990 Q3
  • 1990 Q4
  • 1991 Q1
  • 1991 Q2
  • 1991 Q3
1.25 years
(5 Qtrs) [14]
  • 1990 Q3: −1.1%
  • 1990 Q4: −0.4%
  • 1991 Q1: −0.3%
  • 1991 Q2: −0.2%
  • 1991 Q3: −0.3%
US savings and loan crisis, high bank rate in response to rising inflation caused by the Lawson Boom and to maintain British membership of the Exchange Rate Mechanism.Company earnings decline 25%. Peak budget deficit c. 8% of GDP. Unemployment rises from 6.9% of the working population in 1990 to 10.7% in 1993. [18] Took eleven quarters for GDP to recover to its pre-recession peak in the Spring of 1990. [12] Annual inflation was 9.5% in 1990, 5.9% in 1991, 3.7% in 1992. and 1.6% in 1993.[ citation needed ] Interest rates were stubbornly high initially but declined from a high of 14.8% at the start of the recession to a low of 5.9% by the end of the recession,[ citation needed ] though interest rates were hiked twice during Black Wednesday.
Great Recession
  • 2008 Q2
  • 2008 Q3
  • 2008 Q4
  • 2009 Q1
  • 2009 Q2
1.25 years
(5 Qtrs)
  • 2008 Q2: −0.2%
  • 2008 Q3: −1.7%
  • 2008 Q4: −2.2%
  • 2009 Q1: −1.8%
  • 2009 Q2: −0.3%
 2007–2008 financial crisis, rising global commodity prices, subprime mortgage crisis infiltrating the British banking sector, significant credit crunch.The recession lasted for five quarters and was the deepest UK recession since the Second World War. [14] Manufacturing output declined 7% by end 2008. It affected many sectors including banks and investment firms, with many well known and established businesses having to fold. [19] The unemployment rate rose to 8.3% (2.68m people) in August 2011, the highest level since 1994. There was much speculation of a 'double dip' recession during the 2010s, but this proved not to be the case. However, the 2010s saw four separate periods of quarter-on-quarter fall in growth: 2010 Q4 (−0.4); 2011 Q4 (−0.1); 2012 Q2 (−0.5); and 2012 Q4 (−0.2). [20]
COVID-19 recession
  • 2020 Q1
  • 2020 Q2
0.5 years
(2 Qtrs)
  • 2020 Q1: −2.6%
  • 2020 Q2: −18.8%
 COVID-19 pandemic Majority of the decrease in GDP occurred in March and April 2020 and was followed by a sharp increase in June and July although GDP did not return to pre-pandemic levels until late 2021. The drop, while brief, was the deepest recession since 1709. [21] The event triggered an inflationary shock and a wider cost of living crisis. [22]
2023 recession
  • 2023 Q3
  • 2023 Q4
0.5 years
(2 Qtrs)
  • 2023 Q3: -0.1%
  • 2023 Q4: -0.3%
A rise in economically inactive people in the wake of the COVID-19 pandemic, attributed to long term sickness levels, and a decline in school attendance which may also be driven by sickness rates. [23] GDP per capita began to fall in Q2 2022, the longest run of falls or stagnation by that metric since 1955. By February 2024 GDP per capita had shrunk by 4.2% compared to its pre- cost of living crisis peak. [24] The growth in population from record-high immigration had offset this decline in the overall GDP statistics in 2022 and early 2023. [22] [25]

See also

Related Research Articles

In economics, a recession is a business cycle contraction that occurs when there is a period of broad decline in economic activity. Recessions generally occur when there is a widespread drop in spending. This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster. But there is no official definition of a recession, according to the IMF.

<span class="mw-page-title-main">Economy of Spain</span>

The economy of Spain is a highly developed social market economy. It is the world's 15th largest by nominal GDP and the sixth-largest in Europe. Spain is a member of the European Union and the eurozone, as well as the Organization for Economic Co-operation and Development and the World Trade Organization. In 2023, Spain was the 18th-largest exporter in the world. Meanwhile, in 2022, Spain was the 15th-largest importer in the world. Spain is listed 27th in the United Nations Human Development Index and 36th in GDP per capita by the World Bank. Some main areas of economic activity are the automotive industry, medical technology, chemicals, shipbuilding, tourism and the textile industry. Among OECD members, Spain has a highly efficient and strong social security system, which comprises roughly 23% of GDP.

<span class="mw-page-title-main">Economy of the United Kingdom</span>

The economy of the United Kingdom is a highly developed social market economy. It is the sixth-largest national economy in the world measured by nominal gross domestic product (GDP), ninth-largest by purchasing power parity (PPP), and twenty-first by nominal GDP per capita, constituting 3.1% of nominal world GDP. The United Kingdom constitutes 2.3% of world GDP by purchasing power parity (PPP).

<span class="mw-page-title-main">Economy of the United States</span>

The United States is a highly developed free market economy. It is the world's largest economy by nominal GDP; it is also the second largest by purchasing power parity (PPP), behind China. It has the world's sixth highest per capita GDP (nominal) and the eighth highest per capita GDP (PPP) as of 2024. The U.S. accounted for 26% of the global economy in 2023 in nominal terms, and about 15.5% in PPP terms. The U.S. dollar is the currency of record most used in international transactions and is the world's reserve currency, backed by a large U.S. treasuries market, its role as the reference standard for the petrodollar system, and its linked eurodollar. Several countries use it as their official currency and in others it is the de facto currency. Since the end of World War II, the economy has achieved relatively steady growth, low unemployment and inflation, and rapid advances in technology.

<span class="mw-page-title-main">Economy of Venezuela</span>

The economy of Venezuela is based primarily on petroleum, as the country holds the largest crude oil supply in the world. Venezuela was historically among the wealthiest economies in South America, particularly from the 1950s to 1980s. During the 21st century, under the leadership of socialist populist Hugo Chávez and his successor Nicolás Maduro, the Venezuelan economy has collapsed, prompting millions of citizens to flee Venezuela. GDP has fallen by 80 percent in less than a decade. The economy is characterized by corruption, good shortages, unemployment, mismanagement of the oil sector, and since 2014, hyperinflation.

The early 1990s recession describes the period of economic downturn affecting much of the Western world in the early 1990s. The impacts of the recession contributed in part to the 1992 U.S. presidential election victory of Bill Clinton over incumbent president George H. W. Bush. The recession also included the resignation of Canadian prime minister Brian Mulroney, the reduction of active companies by 15% and unemployment up to nearly 20% in Finland, civil disturbances in the United Kingdom and the growth of discount stores in the United States and beyond.

<span class="mw-page-title-main">Early 1980s recession</span> Global economic recession

The early 1980s recession was a severe economic recession that affected much of the world between approximately the start of 1980 and 1982. It is widely considered to have been the most severe recession since World War II until the 2007–2008 financial crisis.

<span class="mw-page-title-main">Great Recession</span> Global economic decline from 2007 to 2009

The Great Recession was a period of market decline in economies around the world that occurred in the late 2000s. The scale and timing of the recession varied from country to country. At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. One result was a serious disruption of normal international relations.

This article gives the timeline of the Great Recession, which hit many developed economies in the wake of the 2007–2008 financial crisis.

The European recession is part of the Great Recession that began in mid-2007. The crisis spread rapidly and affected much of the region, with several countries already in recession as of February 2009, and most others suffering marked economic setbacks. The global recession was first seen in Europe, as Ireland was the first country to fall into recession from Q2-Q3 2007 – followed by temporary growth in Q4 2007 – and then a two-year-long recession.

While beginning in the United States, the Great Recession spread to Asia rapidly and has affected much of the region.

<span class="mw-page-title-main">Lost Decades</span> Period of economic stagnation in Japan

The Lost Decades are a lengthy period of economic stagnation in Japan precipitated by the asset price bubble's collapse beginning in 1990. The singular term Lost Decade originally referred to the 1990s, but the 2000s and the 2010s have been included by commentators as the phenomenon continued.

<span class="mw-page-title-main">Stimulus (economics)</span> Attempts to use monetary or fiscal policy to stimulate the economy

In economics, stimulus refers to attempts to use monetary policy or fiscal policy to stimulate the economy. Stimulus can also refer to monetary policies such as lowering interest rates and quantitative easing.

Recession shapes or recovery shapes are used by economists to describe different types of recessions and their subsequent recoveries. There is no specific academic theory or classification system for recession shapes; rather the terminology is used as an informal shorthand to characterize recessions and their recoveries. The most commonly used terms are V-shaped, U-shaped, W-shaped, and L-shaped recessions, with the COVID-19 pandemic leading to the K-shaped recession. The names derive from the shape the economic data – particularly GDP – takes during the recession and recovery.

<span class="mw-page-title-main">1973–1975 recession</span> Period of economic stagnation in the Western world

The 1973–1975 recession or 1970s recession was a period of economic stagnation in much of the Western world during the 1970s, putting an end to the overall post–World War II economic expansion. It differed from many previous recessions by involving stagflation, in which high unemployment and high inflation existed simultaneously.

In the United States, the Great Recession was a severe financial crisis combined with a deep recession. While the recession officially lasted from December 2007 to June 2009, it took many years for the economy to recover to pre-crisis levels of employment and output. This slow recovery was due in part to households and financial institutions paying off debts accumulated in the years preceding the crisis along with restrained government spending following initial stimulus efforts. It followed the bursting of the housing bubble, the housing market correction and subprime mortgage crisis.

<span class="mw-page-title-main">United Kingdom national debt</span> Total quantity of money borrowed by the Government of the United Kingdom

The United Kingdom national debt is the total quantity of money borrowed by the Government of the United Kingdom at any time through the issue of securities by the British Treasury and other government agencies.

<span class="mw-page-title-main">Abenomics</span> Japanese economic policy since the 2012 re-election of Shinzo Abe as Prime Minister

Abenomics refers to the economic policies implemented by the Government of Japan led by the Liberal Democratic Party (LDP) since the December 2012 general election. They are named after Shinzō Abe (1954–2022), who had been appointed as Prime Minister of Japan on his second term from 2012 to 2020. Abe was the longest-serving prime minister in Japanese history. After Abe resigned in September 2020, his successor, Yoshihide Suga, stated that his premiership would focus on continuing the policies and goals of the Abe administration, including the Abenomics suite of economic policies.

<span class="mw-page-title-main">COVID-19 recession</span> Economic downturn, primarily due to the COVID-19 pandemic

The COVID-19 recession was a global economic recession caused by COVID-19 lockdowns. The recession began in most countries in February 2020. After a year of global economic slowdown that saw stagnation of economic growth and consumer activity, the COVID-19 lockdowns and other precautions taken in early 2020 drove the global economy into crisis. Within seven months, every advanced economy had fallen to recession.

<span class="mw-page-title-main">2021–2023 inflation surge</span> Global inflation following the COVID-19 pandemic

Following the COVID-19 pandemic in 2020, a worldwide surge in inflation began in mid-2021 and lasted until mid-2022. Many countries saw their highest inflation rates in decades. It has been attributed to various causes, including pandemic-related economic dislocation, supply chain disruptions, the fiscal and monetary stimulus provided in 2020 and 2021 by governments and central banks around the world in response to the pandemic, and price gouging. Preexisting factors that may have contributed to the surge included housing shortages, climate impacts, and government budget deficits have also been cited as factors. Recovery in demand from the COVID-19 recession had, by 2021, revealed significant supply shortages across many business and consumer economic sectors.

References

  1. ↑ "Q&A: What is a recession?". BBC News. 8 July 2008.
  2. ↑ "Glossary of Treasury terms". HM Treasury. Archived from the original on 2 November 2012. Retrieved 25 October 2012.
  3. 1 2 Inman, Phillip (7 May 2020). "War and the weather: what caused the huge economic slump of 1706?". The Guardian. ISSN   0261-3077 . Retrieved 2 July 2020.
  4. ↑ "What happened in 1709? Why the UK economy slumped into a recession". inews.co.uk. 15 April 2020. Retrieved 15 May 2020.
  5. ↑ "Public Spending Chart for United Kingdom 1800–1830 – Central Government Local Authorities". ukpublicspending.co.uk. Retrieved 9 August 2016.
  6. 1 2 3 4 "Public Spending Chart for United Kingdom 1800–1900 – Central Government Local Authorities". ukpublicspending.co.uk. Retrieved 9 August 2016.
  7. 1 2 Cain, P. J.; Hopkins, A. G. (2002). British Imperialism, 1688–2000. Longman. ISBN   9780582472860 . Retrieved 9 August 2016.
  8. ↑ "Public Spending Chart for United Kingdom 1856–1859 – Central Government Local Authorities". ukpublicspending.co.uk. Retrieved 9 August 2016.
  9. ↑ "Public Spending Chart for United Kingdom 1865–1868 – Central Government Local Authorities". ukpublicspending.co.uk. Retrieved 9 August 2016.
  10. 1 2 D Smith, Sunday Times (UK) 9 November 2008
  11. ↑ "NIESR graph of 6 UK recessions" (PDF).
  12. 1 2 3 4 "Bank of England February 2009 Quarterly inflation report" (PDF). Bank of England. Archived from the original (PDF) on 15 November 2009. Retrieved 9 August 2016.
  13. 1 2 "Economy tracker: GDP". BBC News. 27 January 2015. Retrieved 9 August 2016.
  14. 1 2 3 4 5 6 7 "Quarterly National Accounts – National accounts aggregates (ABMI Gross Domestic Product: chained volume measures: Seasonally adjusted £m, constant prices)". Office for National Statistics. 20 December 2013.
  15. ↑ "Economic policy and the motor recession". The Spectator. 12 July 1956. Retrieved 9 August 2016.
  16. ↑ Love 1969, p. 651
  17. ↑ "A Review Of Past Recessions | Investopedia". investopedia.com. Retrieved 9 August 2016.
  18. 1 2 "UK unemployment". Financial Tubes, 20 November 2008
  19. ↑ "CBI February 2009 Economic forecast" (PDF). Confederation of British Industry. Archived from the original (PDF) on 27 September 2011. Retrieved 9 August 2016.
  20. ↑ "UK GDP since 1955 | Business Rogers". The Guardian. 9 March 2009. Retrieved 9 August 2016.
  21. ↑ Partington, Richard (12 February 2021). "UK economy hit by record slump in 2020 but double-dip recession avoided". The Guardian.
  22. 1 2 "The inflationary consequences of real shocks".
  23. ↑ Wallace, Tim; Chan, Szu Ping (15 February 2024). "How worklessness and school truancy drove Britain into recession". The Telegraph. Archived from the original on 15 February 2024.
  24. ↑ "UK falls into recession, and a far deeper living standards downturn • Resolution Foundation". 15 February 2024.
  25. ↑ "Migration too high says Sunak, as total hits record level". BBC News. 25 May 2023.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.