5 of the Worst Recessions in UK History

The definition of ‘recession’ is when a country’s GDP (Gross Domestic Product) value falls for two quarters in a row. An economy grows as its GDP increases, so a continued decrease in this figure indicates a struggle. While businesses need to ensure they’re undertaking robust and efficient accounting all the time, records and audits become even more important during periods of economic tumult. Here are some of the worst Recessions in UK History.

Covid-19 Recession (2020)

In the UK, the most recent official recession took place during 2020 – and it was, perhaps unsurprisingly, a result of the Covid-19 pandemic, which saw enforced prolonged lockdown periods and businesses forced to shut for public safety reasons. The economy contracted “more than twice as much as the previous largest annual fall on record”, according to the Office for National Statistics (ONS), but managed to avoid a ‘double dip’ by growing in December 2020, thanks to restrictions easing.

The Great Recession (2008)

Known as the Great Recession; 2008 saw economies around the world crash in the worst financial disasters since the Great Depression. Driven primarily by a housing market crash in America and investment bank Lehman Brothers collapsing, huge institutions across the UK folded, with the government forced to ‘bail out’ several banks. Unemployment across the country rose to over 2.6 million people and the ongoing impacts lasted for a decade, birthing the ‘age of austerity’.

Early 90s Recession (1990-92)

As Prime Minister Margaret Thatcher’s stronghold on Britain began to wane after a decade in power, her Chancellor’s policies threw the country into an inflationary spiral. With interest rates at a then all-time high, the UK joined the European Exchange Rate Mechanism in an attempt to curb it but crashed out in 1992. Furthermore, in the US, a raft of saving and loans associations went bust, impacting British investments.

The Great Slump (1430s-1480s)

As one of the first recorded ‘credit crunches’ in British history, the Great Slump was caused by silver shortages which led to coinage deteriorating. Medieval English leaders began rationing credit and the effects spread across the county: with no real recovery for almost half a century.

The Great Frost (1709)

As the name would suggest, the Great Frost was caused by an unusually cold winter across Europe. This brought commerce and trade to a grinding halt – even the Thames froze over! What at first seemed to be a novelty dragged on for three months, wreaking havoc on the prevalent agricultural economy. Communities faced starvation, as crops failed, and grain prices skyrocketed.

One issue commonly faced by businesses facing economic conditions of all types is that they only invest in accounting once a year, when tax returns are due; when working on building efficiencies, streamlining processes and identifying areas for improvement can help companies weather all storms.

If you want to make sure your business is best placed to take on the challenging economic climate, contact the DL Accounts team.