Economics Articles

Essays on topical issues, latest developments in UK and global economies, and answers to readers questions

How to know when you’re in a recession?

Posted on July 22, 2016

A recession is defined as a decline in real GDP for two consecutive quarters. We will know an economy is in an official recession after six months of falling national income. A recession will typically lead to higher unemployment, decline in confidence, falling house prices, decline in investment and lower inflation. However, although that may …

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Consumer confidence

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Consumer confidence is the outlook that consumers have towards the economy and their own personal finance situation. This outlook can be optimistic (high consumer confidence) or pessimistic (low consumer confidence) The level of consumer confidence will be an important factor that determines the willingness of consumers to spend, borrow and save. A high level of …

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Lagging and leading indicators

Posted on July 21, 2016

A lagging indicator is an economic statistic that tends to have a delayed reaction to a change in the economic cycle. A leading indicator is an economic statistic that tend to predict future changes in the economic cycle. A co-incident indicator is a variable that changes with the whole economy. Recession of 2008 was very …

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