A "recession" is a contraction of the economy marked by a decline in gross domestic product (GDP), an increase in unemployment, and a drop in trade that lasts at least six months. A "depression" is simply defined as a recession that lasts longer and has more serious economic consequences. Major recessions/depressions that have affected the United Kingdom since the turn of the 20th century are:
1. The Post-World War I Depression (1919-1921)
In the run-up to the war, nations ramped up their manufacturing and defense sectors in anticipation of a global conflict. Afterwards, however, most countries scaled back on production, causing a drop in GDP worldwide. In addition, a huge numbers of soldiers came uk home looking for work, which triggered a significant rise in unemployment. In Europe, national economies had been badly battered by the fighting, which had damaged or destroyed factories and farms.
In the United Kingdom, GDP declined and deflation, the continuous drop in the price of goods and services, rose as high as 14 percent. In Germany and Central Europe, however, conditions were much worse, with hyperinflation reaching staggering heights and the obligation of defeated countries to pay war reparations adding more pressure on the already weak state economies.
2. The Great Depression (1930-1931)
This worldwide economic crisis began as early as 1929 in some countries and didn't end until the beginning of World War II. International trade dropped by one-half to one-third of pre-depression levels and unemployment skyrocketed.
The demand for British goods plummeted, leading to widespread closing of British factories and a nationwide unemployment rate of 20 percent. In some places, it exceeded 70 percent. In protest, citizens organized hunger marches, the largest and one of the most violent being the National Hunger March of September-October 1932.
3. The Mid-1970s Depression (1973-1975)
In 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) enacted an embargo on exporting oil to the United States and other countries that supported Israel in the Yom Kippur War (October 6-26, 1973), triggering an international oil crisis. The United Kingdom did not suffer as greatly from the embargo as other countries, since the British government refused to support Israel in the conflict and called on that country to return to its pre-1967 borders. Consequently, the U.K. continued to receive oil shipments, but OAPEC's subsequent decision to reduce production to stimulate oil prices had serious consequences for Britons. Aggravated by miners' and railroad workers' strikes, the price of heating oil and coal rose, resulting in government bans on driving, boating, and flying on Sundays.
4. The Early 1980s Recession (1980-1982)
Motivated by a need to control inflation, the U.S. Federal Reserve raised interest rates and decreased the monetary supply. These actions affected economies all around the world. In the United Kingdom, exports and company earnings dropped, resulting in a rise in unemployment from about 6 percent to nearly 11 percent.
5. The Early 1990s Recession (1990-1992)
By the early 1990s, many savings and loan associations in the United States were collapsing, triggering panic among shareholders. Consumer spending dropped worldwide, leading to a decline in demand for factory goods. Company earnings in the United Kingdom dropped by about a quarter, budget deficits skyrocketed, and unemployment rose dramatically.
6. The 2008 Recession (2008-?)
Sparked by a financial crisis that began in the United States with mortgage lending, the 2008 recession rapidly spread to the rest of the world. In Britain, oil prices and unemployment rates rose, the value of houses declined, factory production dropped, and credit became increasingly tight. The government took a series of actions, including cutting national interest rates, but the country's economic improvement continues to be slow.