Are we already in recession?

The Bank of England recently raised hackles by predicting that the economy would shrink in the final quarter of 2022, with Britain spending the whole of next year in recession. Liz Truss was especially critical, saying that a recession was not inevitable. In last night’s Cheltenham debate she again referred to the subject, saying that it was important we did not ‘talk ourselves into a recession’.

But could a recession arrive actually earlier than the Bank of England predicted? This morning’s figures from the Office for National Statistics (ONS) suggest that the economy shrank by 0.1 per cent in the second quarter of this year. If the figures for the third quarter, due in October, also show a fall then Britain could officially be in recession by then. It would not be the first major industrialised country to fall into recession: the US has already recorded two consecutive quarters of negative growth, the traditional and most widely-used definition of a recession – although Joe Biden, aided by Wikipedia, has sought to change this definition to save his blushes.