Dear David,
From Q2 1979 to Q1 1981, quarterly real GDP fell in the UK by 5.5%. Unemployment rose rapidly, from 1.4m in Q2 1979 to 2.4m by the end of the recession, then continued rising through to its peak of 3.3m in 1984 – 12% of the workforce. Unemployment stayed above 3m for 51 straight months. This is the pattern economists expect in a serious recession. Unemployment rises, then stays persistently high, falling back only well into the recovery.
It has also been the experience of much of the developed world since the Great Recession of 2008/09. So, for example, whereas US unemployment was below 5% in 2007, it rose to about 10% in 2010, falling back only gradually over several years thereafter. Similarly, in Spain unemployment rose from 8.4% in 2007 to 27% in 2013.
The UK’s experience with unemployment during the Great Recession has, however, been very different – indeed, almost unique, internationally.
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