List of recessions in the United Kingdom Facts for Kids

A recession is like when a country's economy takes a big pause or even shrinks for a little while. Imagine a busy shop where people usually buy lots of things. During a recession, people might buy less, and the shop might not sell as much. In the United Kingdom, experts usually say a recession happens if the economy shrinks for two quarters (that's two periods of three months) in a row. This is measured by something called real GDP, which is like the total value of all the goods and services a country produces.

Understanding Recessions
- What is a Recession?
- Why Do Recessions Happen?
Major Recessions in UK History
See also

Understanding Recessions

What is a Recession?

A recession is a time when a country's economy slows down or gets smaller. It's usually defined by two main things:

People and businesses spend less money.
The total amount of goods and services produced (called GDP) goes down.

When GDP shrinks for at least six months, it's called a recession.

Why Do Recessions Happen?

Recessions can happen for many reasons. Sometimes, it's because people stop spending as much, maybe because they're worried about the future. Other times, big events like wars, natural disasters, or problems in other countries can cause a slowdown. For example, if a major industry struggles, it can affect many jobs and businesses.

Major Recessions in UK History

The United Kingdom has had many ups and downs in its economy over hundreds of years. Here are some of the most important times when the economy faced a big challenge.

The Great Slump (1430s–1490s)

This was a very long period, lasting about 60 years, when the economy struggled. It happened around the time of the Hundred Years' War, which was a big conflict. Economic blockades, which stopped trade, and a shortage of valuable metals like gold (called the Great Bullion Famine) made things very tough.

The Great Frost (1709)

In 1709, a terrible winter, known as the Great Frost, caused crops to fail. This led to a sharp drop in the economy, with the country's output shrinking by 14% in just three months. It shows how much the weather could affect people's lives and the economy back then.

Post-Napoleonic Depression (1812–1821)

After the long and costly Napoleonic Wars, the UK economy had to adjust. This period, lasting about nine years, was difficult as the country moved from a wartime economy back to a peacetime one.

The Long Depression (1873–1896)

This was a very long period, sometimes called the "Great Depression" before the 1930s one. Even though the economy grew overall during this time, there were many ups and downs. Farmers especially struggled because prices for their goods fell a lot (this is called deflation). It started with a big financial panic in 1873.

Post-World War I Depression (1919–1926)

After World War I, the UK faced another tough economic time. The economy shrank significantly between 1919 and 1921. This was because the country had to switch from making things for the war to making everyday goods again. Prices also fell sharply, which made it harder for businesses.

The Great Depression (1930–1931)

This was a worldwide economic crisis that started in the United States. It greatly reduced the demand for goods made in the UK. The UK economy shrank by about 5% in 1931. To try and help, the UK stopped using the gold standard in September 1931, which meant its money was no longer directly linked to gold. While still difficult, the UK was not hit as hard as some other countries.

Mid-1970s Recessions (1973–1975)

The 1970s were a challenging time. A major cause was the 1973 oil crisis, which made oil much more expensive. This led to a situation called stagflation, where prices went up (inflation) but the economy didn't grow much. Many traditional British industries also struggled, and there were many strikes over pay.

Early 1980s Recession (1980–1981)

This recession was caused by new government policies that aimed to control rising prices by cutting spending and reducing the amount of money in the economy. The UK was also moving away from manufacturing (making things in factories) towards a services economy. This led to a big rise in unemployment, with many people losing their jobs.

Early 1990s Recession (1990–1991)

This economic slowdown was partly due to problems in the US banking sector. In the UK, high interest rates were used to try and control rising prices and keep the British currency stable within a European system called the Exchange Rate Mechanism. This made it harder for businesses to borrow money and for people to afford loans.

The Great Recession (2008–2009)

This was a major global financial crisis. It started with problems in the housing market in the US, which then affected banks and financial companies around the world, including in the UK. Many well-known businesses struggled or even closed down. It was the deepest recession for the UK since World War II, and unemployment rose significantly.

The COVID-19 Recession (2020)

This was a very sudden and sharp recession caused by the COVID-19 pandemic. To stop the virus from spreading, many businesses had to close, and people had to stay home. This meant the economy shrank very quickly, especially in March and April 2020. Although it was short, the drop in economic activity was the biggest since 1709. This event also led to prices going up (inflation) and a cost of living crisis for many people.

2023 Recession (2023–2024)

This recent recession was linked to more people being unable to work, often due to long-term sickness after the COVID-19 pandemic. There was also a drop in school attendance, which might also be linked to health issues. While the overall economy didn't shrink by a huge amount, the amount of GDP per person (GDP per capita) had been falling for a longer time. This means that even with population growth, each person's share of the economy was getting smaller.

List of recessions in the United Kingdom facts for kids

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