Week 5, 2013: UK Recessions

Summary: The disappointing GDP figures released on Friday mean we now have data for a full five years since the peak before the recession in 2008. The fact that we are still a long way off returning to pre-recession levels of output does not compare kindly to any similar period of time in at least the past one hundred years.

What does the chart show? This chart is an extension of one we produced last year, and is inspired by the comparison charts made famous by the NIESR.

It shows quarterly GDP over four different time periods. All have been re-based so that the peak before each recession is equal to 100. For the blue line, the first point is Q2 1920, for the red line it is Q1 1930, for the green line it is Q4 1979, and for the orange 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? While this comparison does not tell the entire story of the difficult economic times we find ourselves in (unemployment has not been as much of an issue as in previous recessions, for example), it is not good news that this is by far the longest recovery period post-recession in the UK since at least the beginning of the twentieth century (it may well be longer, but records from before then are too unreliable to be sure).  To make things worse, with no significant growth obviously forthcoming, it could be another few years before we return to the peak of Q1 2008.