There has been much discussion, not least on this blog, on whether the UK has been in recession or not over the past year or so.
If recession is technically defined as two quarters of declining GDP that has not been the case - although I think that will change soon.
But, this is a definition only suited to pedants because GDP does not, in a very great many ways, reflect the lived reality of most people. The think tank More In Common has apparently addressed the issue by asking people about what they think in answer to the question 'Is the UK in recession?" I cannot find the work on their website, but the FT published the data last week, producing this chart:
Near enough two-thirds of people think the UK is in recession.
Less than a quarter think it is not.
Plot those choices on a decile of income chart and I bet you can imagine what the distribution would be.
So, am I right to say that the UK has been in recession and that this will get worse? I think so. The economics of walking about matters - and the word on the street is we're in recession.
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People feel worse off because the poorest can’t make ends meet and most others are diverting money from little luxuries to essentials.
Intuitively, they feel this is a recession… but it is not because GDP doesn’t distinguish what we spend on or whether we borrow/deplete savings in order to spend.
That’s just the definition of GDP that we live with.
The bizarre thing is that anyone should focus on tiny changes in GDP as a measure of success.
Agreed
It feels like we’re in a recession.
Inflation suggests we’re in a recession.
Spending habits suggest we’re in a recession.
And since the Tories believe they have no responsibility for the current state of affairs, we must be in a recession.
Irrespective of if we are in a recession or not, the fact is pretty straightforward that large numbers of our fellow citizens dont have enough to live on.
The Economy is not delivering, period.
………………….compounded by markets that have failed to deliver what we need at a fair price.
We cannot ignore this because we are in the grip of an exploitation economy (market failure) with a State unwilling to help – including supply side too.
It walks like a duck; it quacks like a duck and swims like duck.
So, it’s recession most definitely.
As the late Robert Kennedy said “GDP measures everything except that which makes life worthwhile”. And economics is actually a study of human nature, so economic outcomes are a consequence of what we believe.
Agreed
Richard.
The easiest way to consider as to if the UK is in the grip of recession (imv) is to ask a simple question:
Does your income, from however you define income, allow you to reasonably service even the most basic of lifestyles?
There will, of course, be those with savings that allow this to happen, there will be those with an adequate income. That said, there will be a high % of the populace that have to consistently consider what their income allows them to do, (or not). For this demographic it would be reasonable to suggest that they have felt the impact of recession for > 18 months now, (and still with the true impact of interest rate rises and inflation to fully materialise)
Defining recession in terms of GDP, Debt repayment, Deficit, Service Cuts or Public Borrowing is merely academic to most. What really matters is the £’s in ones pocket, and there are precious few of those!