Readers Question: Hi, i keep hearing the word recession everywhere i turn. As i understand a recession is 4 quaters of negative growth. This is yet to occur, as official stats have not shown this..
So what i am asking is that are we officially in a recession?
The official definition of a recession in the UK is two consecutive quarters of negative growth.
- Q2 in 2008 GDP growth was 0%
- Q3 in 2008 GDP growth was -0.6%
Graph showing UK GDP growth in 2008
Therefore we are not officially in a recession until Q4 statistics show a fall. However, there is fear that GDP in Q4 2008 could fall very sharply giving the UK the deepest recession since the Great Depression.
It seems rather meaningless to say we are not officially in a recession because for all practical understanding the UK has been in a recession since the end of 2008. It merely reflects a delay in getting statistics.
See also: Definition of Recession