Week 17, 2012: UK Recessions

Summary: Preliminary GDP figures for the first quarter of 2012, released this week, put the UK economy officially back into recession. Our chart this week looks at how the three worst recessions in modern UK history compare.

What does the chart show? The chart shows quarterly GDP over three different time periods. All three have been re-based so that the peak before each recession is equal to 100. For the blue line, the first point is Q1 1930, for the red line it is Q4 1979, and for the green line, Q1 2008. Note that the ONS records only go back to the 1940s, so for the 1930s we have used estimates of the GDP from an NIESR report.

Why is the chart interesting? Although the recent recession initially looked more severe than anything previously, the recovery appeared to be on a par with the late 1970s rather than the classic "double-dip" shape from the 1930s. However, it has now been 17 quarters since the initial recession started, and the UK economy is showing no sign of reaching pre-recession levels. A full recovery had been made by this point in all previous recessions that the UK has faced. News that we are now officially back in recession is bad, but will hopefully represent a blip in the recovery, rather than a full double-dip as seen in previous years.