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Factors that can cause an economic recession

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Last updated 4 Sept 2019

In this video we look at some of the factors that can bring about an economic recession and look at the risks of recession for the UK economy in 2019-20.

Factors that can cause an economic recession

How realistic is the prospect of a recession in the UK economy over the next twelve months or so?

A recession – defined narrowly as a period of six months when real national output declines – is unusual. Recently published research from the Resolution Foundation found that a recession occurs on average every decade, reducing living standards by £2,500 per household in today’s prices and raising unemployment by around 1 million people.

Recession comes about when there is a broad contraction in business and consumer confidence and spending which then leads to a reduction in production, employment, profits and investment.

The last UK recession happened in 2009 in the wake of the Global Financial Crisis. Is there a chance that the UK will enter recession in the final months of 2019 or next year. Most macroeconomic forecasts point to a growing number of risks to economic growth not just in the UK but also in the European Union and the wider Global Economy.

In this short video we will revise some of the main causes of recession and focus on the factors influencing the trade cycle in the UK at the moment.

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