What is a recession?
The Bank of England predicts a recession for the UK economy later this year in 2022.
We all know the term ‘recession’ and often associate it with a downturn in an economy. But what actually is a recession?
“Two consecutive quarters (six months) of a decreasing gross domestic product (GDP)”.
Other factors which indicate a recession:
- Retail sales
- Employment (usually a 1.5-2% rise in unemployment indicates a recession).
The NBER define a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale retail sales.
What is causing this recession?
How does a recession affect me?
- Unemployment could rise and it may become more difficult to negotiate a pay rise with rising operational costs and the financial strain on businesses.
- Graduates may find it difficult to secure their first role.
- The inequality gap may increase, i.e. the disparity between the rich and poor.
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