The year Britain’s first motorway opened and just after Harold Macmillan declared the country had “never had it so good” in July 1957, the economy sank into a brief but steep decline in the summer of 1958.
The collapse came after a flu pandemic had spread from Asia, causing mines and factories to temporarily close. “Setback in Production — Recession through Influenza” ran the headline in the Manchester Guardian in late 1957.
The long postwar boom for western nations came to an abrupt halt in late 1973 when the Yom Kippur war triggered a global oil price shock. From early 1974, striking mine workers and the three-day week in Britain caused a precipitous decline in economic output. GDP fell by 2.7% in the first quarter.
Margaret Thatcher came to power in 1979 following widespread strikes during the winter of discontent at the turn of the year. Her Conservative government drastically raised interest rates to curb soaring inflation and brought in steep spending cuts. However, unemployment continued to soar into the early 1980s as manufacturing was driven to the wall. GDP fell by 2.2% in the autumn of 1979, with another steep fall of 2% in spring 1980.
Unemployment continued to rise throughout the early 1980s as Thatcher’s government imposed its economic reforms, peaking at almost 12% by the middle of 1984. The economy contracted sharply, by 0.9%, that spring, before the Lawson boom, fuelled by cheap credit and City deregulation, took hold in the late 1980s.
The return of inflationary pressures after the Lawson boom forced the government to raise interest rates, popping a bubble in economic activity and property speculation, and causing unemployment to rise. The bust was intensified by Britain’s membership of the Exchange Rate Mechanism, preventing interest rates from being cut, before the UK crashed out of the system on Black Wednesday in 1992.
A meltdown in the global financial system triggered the Great Recession of 2008-09, when big banks around the world stopped lending amid widespread market panic and forced cash-starved businesses to the wall. Recovery was choked off by austerity policies used to contain a surge in public sector borrowing, leading to one of the weakest decades for growth in modern history.
The March lockdown instantly wiped 5.8% off UK output – as much in a single month as in the 18-month decline during and after the financial crisis of 2008-09 – leaving the economy down 2% over the quarter. The Bank of England has warned that output will be down by an unprecedented 25% in the current quarter.
• This article was amended on 15 May 2020. GDP fell by 2.2% in the autumn of 1979, not by 2.7% as the text of an earlier version said.