Just how bad? Comparing the most recent recessions
In the third quarter of 1979, the UK economy contracted 2.4pc before rebounding by 1pc in the next, then contracting for the next five successive quarters. Thus the recession officially began in the first quarter of 1980 but on a peakto-trough basis, it started in the third quarter of 1979. According to the Nationwide house price index, average house prices rose 12.3pc between the second quarter of 1979 and the second quarter of 1982, although in real terms they fell by 17pc. Unemployment soared from 5.3pc (1.4m) in April-June 1979 to 11.9pc (3.3m) in March-May 1984. Manufacturing capacity fell by a fifth.
1990-92 The peak-totrough fall in output was relatively modest. While several major economies showed quarterly detraction in 1989, UK GDP only fell 2.5pc between the second quarter of 1990 and the second quarter of 1992. This was followed by a record run of 15 years of economic growth. The worst-hit part of the economy was the housing market, as people could not afford record mortgage interest payments. There were strong falls in both nominal and real house prices: Nationwide’s measure had them down 20.2pc in nominal terms (33.2pc in real terms) from the third quarter of 1989 to the first quarter of 1993. Unemployment rose from 6.9pc (2m) in AprilJune 1990 to 10.7pc (3m) in DecemberFebruary 1993.
2008-9 Between the first quarter of 2008 and the third quarter of 2009, GDP contracted for six consecutive quarters as output fell 6.4pc from peak to trough. Nationwide recorded an 18.7pc drop in house prices between the third quarter of 2007 and the first quarter of 2009, a 20.2pc fall in real terms due to relatively low inflation. Unemployment stabilised sooner, growing from 5.2pc (1.6m) in January-March 2008 to 8pc (2.5m) in January-March 2010.