In the wake of the 2008/09 recession, the National Institute of Economic and Social Research (NIESR) would often publish a chart to compare the UK’s recovery with those from previous recessions. Using NIESR’s own monthly GDP estimates, ‘the NIESR chart’ compared the decline and growth in GDP through recession and recovery. See, for example, the version from October 2014.
The chart below does something similar with quarterly UK GDP data from the:
- Bank of England (Hills et al, 2015), for 1920Q1-1938Q4
- Office for National Statistics, for 1955Q1-2016Q1
Using the conventional definition of a technical recession (two consecutive periods of quarter-on-quarter decline in GDP), the chart shows the path of GDP for 12 UK recessions. In each case, starting from the last period of GDP growth (the ‘pre-recession peak’), the chart shows how GDP:
- falls for two consecutive quarters (at which point the economy is in a technical recession)
- falls further, to the ‘trough’ of the recession: the lowest level of GDP compared to the pre-recession peak, as a result of the sustained decline
- recovers, returning to, and then surpassing, the pre-recession peak
Each line then extends a further four quarters to show how the UK economy fared in the year after the recovery.
For more information on each recession, either mouse over the individual lines or use the buttons to the right of the chart. For each selection, the chart shows:
- the dates and length of the recession
- how far GDP fell below its pre-recession peak (the trough)
- the time it took to recover to the pre-recession peak
Note that, by mechanically applying the definition of a recession as two consecutive periods of quarter-on-quarter decline in GDP, some recessions in the chart also appear in the recovery periods of earlier recessions. For example, after the 1930Q2-1931Q3 recession, the UK fell into another recession (over 1932Q2-1932Q3) before it had fully recovered from the 1930Q2-1931Q3 one. Both recessions appear as separate lines in the chart, but the second recession also appears in the recovery period of the first. Similarly, the 1975 recession lies in the recovery period of the earlier 1973Q3-1974Q1 recession. In this case, the 1975 recession actually pushes GDP below the trough of the earlier recession (and before the recovery is complete). The chart reports the trough of each individual recession (from a sustained decline in GDP) rather than the deepest trough of each fall below a pre-recession peak, which can be the result of multiple recessions. NIESR’s chart deals with these better, by combining cases like this into single periods of recession and recovery.
Bearing the above in mind, 6 of the 12 recessions in the chart ran their course in a year or less, comprising a recession that lasted two quarters followed by a recovery that took no more than two quarters.
The chart also shows the most recent recession, over 2008Q2-2009Q2, to have been the most severe since the early 1930s, in terms of the depth of the trough. Moreover, the recovery from the last recession was the most protracted of any in the chart, taking four years (16 quarters) for GDP to return to its 2008Q2 level. This was a full year longer than the next-longest recovery, from the recession of the early 1920s. You could argue from the chart that 1977 (the year after the UK had recovered from the 1973Q3-1974Q1 recession) included a period of precarious growth. However, even if you include some of these quarters in the 1970s ‘recovery’, the recovery from the 2008/09 recession remains the longest of any in the chart.
The underlying data for the visualisation are here, compiled from Bank of England and ONS data (see the sources below).
Hills, S., Thomas, R., Dimsdale, N. (2015),
‘Three centuries of macroeconomic data’, Version 2.2, July 2015, Bank of England
National Institute of Economic and Social Research (2014),
‘October 2014 GDP estimates’
Office for National Statistics (2016),
‘Quarterly National Accounts: Quarter 4 (Oct to Dec) 2015’