What is a recession and how could it affect me?

The Office for National Statistics publishes figures for the UK’s Gross Domestic Product. This is the value of all the goods and services the UK produces. The latest ONS figures show that the economy shrank 0. 3% between October and December 2023.

The Bank of England has since suggested that the downturn might already be over. UK economy grew by 0. 1% between July and September of 2023. That followed a 0.

4% fall in GDP between April and June 2020. The previous recession started in 2008 as a result of the global financial crisis, and went on for five quarters, or 15 months. When the economy shrinks and a country goes into recession, these things can go into reverse. Economic growth can mean more jobs are available and companies can pay more to employees and shareholders.

But the pain of a recession is typically not felt equally across society. Benefit recipients and those on fixed incomes are particularly likely to struggle. After 14 rate increases, the Bank has held interest rates at 5. 25% four times in a row.

This makes it cheaper for businesses and households to borrow money. UK has been one of the weaker members of the G7 group of the world’s largest economies. The International Monetary Fund (IMF) predicted that the UK would grow by just 0. 6% in 2024.

That put the US at 2. 5% over 2023 as a whole, the best performance of all other advanced economies. The independent Office for Budget Responsibility expects the UK economy to grow by 0. 7%.

That is less than half of its earlier prediction of 1. 8%.

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