What kind of recession are we in

There were steep cuts in many areas of government spending, except health, education and international aid. The recession has caused the government to run an even bigger deficit, and national debt has also grown rapidly during the period.

An effective vaccine would give the recovery the biggest possible boost. In the meantime, the UK government and others around the world are borrowing huge sums to pay for schemes to protect jobs, support businesses and combat the virus. The Bank of England is also supporting the economy by through quantitative easing, where it tries to encourage individuals and businesses to invest and spend more by buying government bonds.

UK out of recession but growth slows in September. This video can not be played To play this video you need to enable JavaScript in your browser. What is a recession? In normal times, a country's economy grows. Image source, Getty Images. Lockdown helped to push the UK into the worst recession on record. Why does a recession matter? For most people, economic growth is good.

So are the good times back? Economic output fell sharply in the spring, and it has bounced back, but not all the way. Are we going back into recession? What is happening around the world? It only returned to its previous rate of expansion in This is when a recession starts by looking like it will be a V-shaped downturn, but then falls again after what turns out to be a false sign of recovery.

It is also known as a double-dip recession, because the economy drops twice before it recovers to its previous growth rate. The US recession of the early s was in effect two recessions with the economy shrinking from January to July that year. That was followed by a period of sharp expansion before the economy fell back into recession a year later, only recovering at the end of This is the worst-case scenario.

It also goes by another name: "depression". It is when an economy experiences a deep recession and does not recover to its previous rate of growth for several years, if ever. Japan's so-called "lost-decade" of the s is a textbook example of an L-shaped recession. The country had seen solid economic growth from the years immediately after World War Two until the end of the s. Most other countries are facing similar challenges and are likewise engaged in a range of policy actions.

Our economic prospects are tied to our ability to contain the spread of the virus, care for those who fall ill, and develop effective treatments. In addition, fiscal policy has played a critically important role in providing financial support to families, small businesses, and those who are out of work during the crisis.

This timely support contributed greatly to the rebound in consumer spending and jobs that we have seen over the past two months. The Federal Reserve has taken rapid and significant actions to stabilize critical parts of our financial system and to support the flow of credit, thereby helping position the economy for a strong and sustained return to maximum employment and price stability.

Bringing interest rates down to near zero makes it easier for households and businesses to meet their borrowing needs and fosters favorable financial conditions that will help promote a rebound in spending and investment.

In addition, the Fed has been conducting large-scale repo operations and purchasing sizable quantities of U. Treasury securities and agency mortgage-backed securities to support market functioning at a time of extraordinary volatility in markets.

Although functioning in financial markets has improved since March, the Federal Reserve has indicated that it will continue to increase asset holdings to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions.

In addition to stabilizing financial markets, the Federal Reserve has instituted a number of programs to support the flow of credit to households, businesses, and state and local governments.

These actions will enable them to continue to do their work, both now and when normal life resumes. Taken together, these programs have helped restore the functioning of financial markets, foster favorable financial conditions, and support the continued flow of credit to businesses and households. I'll conclude with this: This pandemic and this recession form a pivotal moment for the Federal Reserve. We are seeing signs that the economy has started to recover. Still, the economic outlook remains highly uncertain and it's going to take considerable time to restore the economy to its full potential.

But rest assured, we are committed to using our full range of tools to support the economy and bring about a full and robust recovery. Crane, R. Unlike other proposals , the program did not facilitate long-term strategies designed for industries whose operations will be affected by the pandemic for the foreseeable future. However, the passage of a new and timely stimulus bill appears unlikely , leaving the accommodation and food services sector in a bind.

Public health guidance requires careful consideration of risks and benefits for consumers and workers in restaurants, bars, hotels, and other indoor recreation spaces. As long as COVID cases continue to increase across states , recovery in this sector will be anything but straightforward.

A sign posted outside Bagel Express announces that it is permanently closed during Phase 4 of reopening following restrictions imposed to slow the spread of COVID September 7, in New York City. October 16, Safia Sayed.