Recession

Subject: Economy

Context:

The UK economic output shrank by 20.4 per cent in the second quarter of 2020, pushing the country into the deepest recession recorded by any major global economy so far

Concept:

• When the economy contracts for two quarters in a row (or six months), this change is classified as a recession.
• The term denotes a business cycle contraction, when there is a general decline in economic activity and occurs when there is a widespread drop in spending (an adverse demand shock).
• When a country’s economy is healthy, it grows over time and its GDP or the value of the goods and services it produces — increases.
• The last time a number of countries entered a recessive phase was when the global financial crisis broke in 2007.
• A recession can become a depression if it lasts long enough, like in the late 1920s.