Are we heading into a major recession?

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Things are already tough in my industry - I’m a contractor and this past year is my worst in over two decades - but should I be expecting things to get worse not better?

and I sound stupid, but what are the main economic indicators?

I wouldn’t be surprised. Productivity is low, interest rates are falling again, the dollar is strong and Trump is playing silly buggers in the global economy, the uK government is a bit clueless and business confidence and inward investment aren’t exactly great. Unemployment is high among young people and yet the proportion of productive citizens isn’t improving enough due to higher numbers of inactive/retired people post Covid. Health of the nation is poor and social welfare is crippling the economy. Oh and we left the EU and that’s all still a crappy old mess.

From my perspective - yes.

Small businesses like mine are being milked by the Govt with no thought or understanding of the consequences. I have abandoned my expansion plans and I'm currently aghast at the price of my raw materials. I've also cut back sharply on stock levels.

I also lost my European and EEA markets on 13th December as I cannot and will not comply with the new GPSR requirements. Luckily most of my international sales were to non EU countries anyway so whilst it hurts, it isn't a total disaster.

Might just give up, close down and claim benefits instead.

Probably not.

But a sustained period of low growth - definitely,

We'll have a period of low growth/recession for the next decade or so definitely. AI will drive a recession in the longer term as people lose their jobs and have no disposable income. The extended period post-2008 crash is about consolidating wealth in the hands of the few. The stupid thing is we allow it to happen.

Huge amount of money printed - and then wasted - over Covid. But really it goes back to 2008 and the poor wage growth we’ve suffered since then. As a country we need to go back to what we’re good at like engineering, and then capitalise on it.

Recession is defined as two quarters where the size of the economy falls.

Economists have various ways of measuring how big a countrie's economy is. This is known as GDP.

It can get bigger (growth) or get smaller (recession/depression etc).

We have had higher energy prices due to mostly the Ukraine war and also rising prices generally due to covid and also the increase in energy prices (because most goods need energy to make and most services need energy to heat the shop/etc).

This has caused a cost of living crisis which means people with the same money to spend are getting less for it.

We also have high interest rates, at least initially due to Liz Truss. This means many people are paying more on their mortgage/businesses are paying more money for loans etc.

This means that many people have a lot less money to spend. So there is less demand in the economy - particularly for consumer items - pubs, restaurants etc are all having a tough time now.

The economy mostly isn't getting smaller but it isn't growing much either.

It's likely to stay this way for a while, at least until we get some positive news - eg ending of the Ukraine war, realignment with Europe so businesss can export there more easily etc.

Yes we have a predictable Labour shit show.
They have no idea whatsoever how to create growth.

By then we will be swamped due to no border control and the NHS will collapse due to the pressure. Housing crisis etc.

We were shouted down on here when we tried to warn people, I really wish I had been pleasantly surprised, but sadly not.

People voted for hope and now they have realised that the only way we are ever going to get out of this mess is to suspend all immigration for 5 years - ensure everyone has a home and a job. Fire up the economy and cut the benefits bill in half by making healthy people work for longer. Before we lose all of the companies and professionals creating wealth because it’s unbearable to live here.

It is ridiculous that people are still blaming truss, typical Labour deflection. Reeves is ruining our credit rating as we speak and driving the economy into a doom
cycle. I am holding them fully accountable.

Yes, I think so. Interest rates are too high for the current state of the economy and are not coming down quickly enough.

I think we are.
I remember the last one, I feel times are harder now than the last recession. What would happen if we have another one? How bad could it get?

Labour decided to make a bad situation for businesses even worse.

Stagflation is the fear - higher inflation and lower growth rates. US market turbulence won’t help anyone’s confidence. Being outside EU makes trade more difficult and new markets haven’t filled the gaps.

Yep. Low productivity, sky high net zero energy prices, sky high taxes to fund the unproductive parts of the economy, low consumer spending, over regulation......
A recession is nailed on.

On a GDP per capita basis, things are even worse.

Yes, and most of us are existing rather than living, can't afford to do a full shop. Can't afford a new pair of trainers for my son because I am paying extortionate bills, i've not been out or had a take away in over a year

Yes I think we are unfortunately.
I'm a small business owner and things are more difficult now than during the financial crash. The budget has been crippling for us because of the rise in employment costs. Everything is more expensive and many businesses still haven't recovered from covid.
The cost of living is at breaking point for many people, and we have yet to feel the full effects of the price rises and job losses the budget will cause.
Truss and Kwartengs mini budget was shit, but at least she was removed quickly and the mini budget abandoned. Reeves is ploughing on regardless.

So who should people vote for? The tories were a shit show too.

Bloomberg are reporting that the OBR report will show that the fiscal rules will be broken, meaning the Chancellor has completely run out of headroom. Sorry I can't link as its behind a pay wall, but article easy to Google.

This means that in March we will probably see spending cuts, aka austerity 2.0. The OBR will probably downgrade the UK's growth forecast too.
Reeves needs to remove her boot from the throats of businesses.

And we need to rejoin the customs union and single market. That madness has lasted long enough. Pride and ideology won't save businesses and feed families ffs...

Absolutely - of course we do. I don't understand why the Government isn't on the case as it's patently obvious Brexit has been a disaster for trade. The Government has taken on the pensioners with the scrapping of the Winter Fuel Allowance, so I can't think they'd be bothered about those that voted for Brexit. Anyone with half a brain would think we do need to rejoin the customs union and single market - Labour need to get cracking and sort it out.

I believe there is a general slowing and businesses are feeling the pinch hard.

Discretionary spending is down substantially and recruiters have been bracing themselves for a very tough '25.

The advice privately is to stay put job wise.

The whole economy is still blighted by having allowed the housing bubble to inflate well beyond sustainable fundamentals — ever since 2001, but particularly after 2010. There was a chance to allow it to continue to deflate after the financial crash; but instead the Coalition/Tory governments not only restarted the housing boom and pumped cash into keeping house prices high, but inflated them even further.

Now we’re entering a period where the collective salaries of younger workers won’t realistically be able to support current prices going forward, and there’s the triple whammy of extra pressure on the NHS, Brexit and an unstable world economy with stubbornly high energy prices at the same time. We’re likely looking at a decade or more of slow, painful unwinding, where the tax take is high but still isn’t enough to pay for crumbling services neglected during austerity; everyone gets squeezed and squeezed even more to no visible effect; Brexit strangles any economic growth at birth; and our living standards get lower and lower and lower while public services collapse.

The effect of the Tories’ misguided austerity policies, pumping money into housing assets (and encouraging even more landlordism), and the worst of all, Brexit, will take a long time to correct and we’re in for a lot more pain yet. These have been some of the stupidest, counterproductively short-termist, asset-stripping policies of the whole last century. I’m not a huge fan of Starmer so far, but the current direness of the situation is all squarely of the Tories’ making.

when did we leave the last one?
Credit crunch
Cost of living crisis…

Well what are you waiting for? Give up your business, treat yourself and claim the life of Riley on UC.

Hope you don't have a mortgage though, as UC won't cover that but never mind, just go to the council and ask to be socially housed. What's that? There isn't enough social housing to go round and what there is is often poorly maintained and a health hazard?

Oh well, better rent privately then. Except, local housing allowance has been cut to only cover a third of local rents and of that third it will be very difficult to find a landlord who takes you and doesn't openly treat you with contempt.

Temporary, overcrowded accommodation it is then!

Luckily, if you have kids, you may get enough to make some sort of limited life until....they leave school, and then you will have to claim as a single person. At which point, your earning potential will have been substantially decreased, you will own no home, no capital over £16,000 (and any savings over £6000 your UC will be docked).

At least you'll have a lot of time on your hands to contemplate what a wonderful decision you made by sticking it to the government. Apart from the job centre requiring you to seek, interview for jobs and evidence it a set number of hours a week.

Unless you have a disability?
Well, you dont because your PIP assessor said so. And if you don't comply with DWP demands, remember comrade, you will be sanctioned.

And then you'll come on mumsnet and discover how much you're despised and looked down on and viewed as a worthless piece of scum and it'll all be worth it.

So go on, @LadyPoison,I dare you

Poor wage growth partly started with freedom of movement.
A warehouse worker on £10 an hour suddenly found themselves competing with EU workers who would willingly work for less.
I don’t have any issues with EU workers as they are a fab bunch but it did impact British citizens.

That is a really nasty post even by Mumsnet standards.

There are many small businesses like mine that are struggling and on the brink of survival. It's tough being a sole trader. We have no safety net. If I can't afford to buy gold then I go under. It's as simple as that! In a poor economy discretionary spending is the first thing to be cut back on and that hurts me badly.

I guess you are sitting pretty with a good job and a pension. Good for you.

but should I be expecting things to get worse not better?

I don't think things will get better in my lifetime! There isn't any money