UK in recession? Does that mean anything for us?

JasonRA

Hello. Does a recession effect us in any way? I think of it as "no money left" is that the case?

From Sky News. https://news.sky.com/story/uk-economy-in-a-recession-13071973

A recession is defined as two consecutive three-month periods where the economy contracts rather than grows.

A major measure of economic growth, gross domestic product (GDP) shrank 0.3% between October and December, the latest Office for National Statistics (ONS) data shows.

While previous recessions were long lasting - such as during the global financial crash of 2008 and 2009 - this one is likely to be mild and short-lived.

It could also prompt interest rate-setters at the Bank of England to bring down interest rates sooner, and reduce the cost of borrowing.

But the data will be bad news for Prime Minister Rishi Sunak and the Conservatives, who made growing the economy one of their five key pledges.

Consumer spending power has been eroded by the cost of living crisis, with high inflation and expensive energy bills eating into disposable income.

Albus_Scope

Hi @JasonRA, a great question!

Unfortunately, we're already feeling the effects of a recession, but now we're officially in one, if that makes sense? Basically the economy is shrinking instead of growing.
 So the government will try and more places to cut funding from, businesses will be less likely to offer pay rises, etc. But often the banks will lower interest rates which can boost public spending and keep businesses afloat.

 This BBC article from earlier today covers it very well.

woodbine

It's already being called "Rishi's recession" he promised to stimulate growth but is failing miserably, the recession is forecast to last for all of 2024.

The BofE won't reduce interest rates because we are in a recession, after all we have seen little growth for 14 years of Tory misery now.

Will it affect the population in general probably as we will see more businesses go under and more jobs lost, if 2023 was a bad year due to inflation 2024 looks like being even more awful due to Tory mismanagement of the economy.