Output and expenditure in the last three UK recessions

Abstract

This article describes the main features of the last three UK recessions using the output and expenditure measures of Gross Domestic Product (GDP) to reflect supply and demand activity in the economy. The most recent recession saw a similar peak to trough fall in GDP as the early 1980s recession. Both these recessions, which coincided with a period of downturn in the global economy, were more severe than the early 1990s recession where the peak to trough fall in output was relatively modest. The services sector made a larger contribution to the latest recession than before, perhaps reflecting the growing share of the sector in total UK output and its strong growth in the years leading up to the downturn. Falling output of business and financial services were a particular feature of the most recent recession. Looking at the expenditure side, gross fixed capital formation, and in particular business investment, was a greater contributor to the fall in GDP in the most recent recession than in the early 1980s and early 1990s recessions.