A record-breaking recession
Updated on 26 January 2010
The UK is expected to come out of recession this morning. But how does it compare to previous ones? Neil Macdonald takes a look at the past to see what lessons have been learned.
The "official definition" of recession is that gross domestic product declines for at least two consecutive quarters.
If GDP expands in the fourth quarter of 2009, then the recession in the UK will have lasted for six consecutive quarters (from the second quarter of 2008 to the third quarter of 2009) and output will have fallen from peak to trough by 6.03 per cent.
If this holds, then it will be the worst recession on the basis of official figures - just pipping the Thatcher recession of the early eighties at the post.
The UK has experienced six official recessions. There were two downturns under the Conservatives in the fifties and sixties but both were very mild.
There were more severe recessions during the more turbulent seventies - one each under Conservatives and Labour.
The recession at the beginning of Mrs Thatcher's reign very nearly matches Mr Brown - and was characterised by a rise in unemployment well over three million.
Her period in office ended - and was partly caused by - another recession, which dragged on under John Major (though Mr Brown might note that it didn't stop Mr Major winning an election in 1992).
Recession timeline: a brief history
The graphic below shows the length of previous recessions under earlier governments and shows how far GDP fell.
In our timeline, it's worth noting that we show Mrs Thatcher's recession as lasting for 21 months - that measures the decline in output from its peak before the recession began to its trough.
But there's an interesting technical wrinkle here - the economy actually grew for one quarter in midst of the downturn. The recession on the official definition of consecutive quarters of shrinkage only lasted for 15 months. So on that interpretation of the data, we've just experienced the LONGEST recession (six quarters) as well as the deepest.
It's worth noting that the ONS only started publishing quarterly GDP data in 1955, so it's impossible to talk about recessions on the official definition before this.
However, we know that there were severe downturns at various points before this.
Martin Weale of the National Institute of Economic and Social Research believes output fell by 8 per cent in 1930 alone, as the UK was hit by the onset of the Great Depression.
He's modelled output in Britain between 1924 and 1938 and you can see the results here.
But there have been other periods when the economy has declined faster than in the lastest recession. Output dropped sharply in 1945, as the economy switched from a war to a peace footing. There were also big drops in output - possibly as much as 10% in a single year - at the end of World War One.
You can see how economic output has developed over the last 100 years here.
