What was so special about the 1980s recession?

penguine

I've noticed more comments on this board lately about the 1980s recession, about how we ought to be comparing this one to the 1980s instead of to the 1990s. I don't really remember either (I came to the UK in 1998) so was wondering if anyone could explain the causes and main features of those two recessions and why this might be more similar to one or the other?

Heyman_2

http://en.wikipedia.org/wiki/Early_1980s_recession

Seems it was borne out of an attempt to address high inflation in the US at the time (circa 14%), which we don't have now so not sure where the comparisons come from.

Maybe people are talking about what they think will happen i.e. high inflation but that would suggest ANOTHER recession if/when that actually happens.

Edit: Reading down further, it looks like the banks faced similar difficulties to what they do now, but for very different reasons and not nearly as severe as this time around.

Dan:_4

Its worth noting that HPs returned to peak very quickly after the 1980s recession.

lostinrates

penguine, this is a useful question, thnk you.

Different people say this is the worst since various other times in the last centuary. I'd be interested to see how contributers here rnk the various recessions in severity. Because some of the worst than dates I've read are contradictory.

Heyman_2

Here's an article that more directly answers your question -

http://www.telegraph.co.uk/finance/financetopics/recession/4323064/UK-recession-in-1980-What-was-it-like.html

penguine

Dan: wrote: »

Its worth noting that HPs returned to peak very quickly after the 1980s recession.

That must be why the bulls keep referring to it

StevieJ

I suppose big difference was the relatively new introduction of north sea oil revenues that financed the Tory dole queues, and the completly different monetary policies.

penguine

Heyman wrote: »

Here's an article that more directly answers your question -

http://www.telegraph.co.uk/finance/financetopics/recession/4323064/UK-recession-in-1980-What-was-it-like.html

Mrs Thatcher and her Chancellor Geoffrey Howe confronted the recession in a very brutal way. Rather that cut taxes, they raised them, and rather than increase Government spending, they slashed it.

In contrast to today, the pound was relatively robust against the dollar during the 1980s recession, remaining above the $2 mark

Sounds pretty different then.

penguine

Found another article (though not very detailed) summarising the 8 recessions since 1945. In terms of unemployment we have already surpassed the 1980s recession (approx 1 million) and 1990s recession (almost 2 million).

www.telegraph.co.uk/finance/financetopics/recession/4320908/UK-recession-How-does-this-one-compare-to-those-since-1945.html

Does anyone know how these figures compare in terms of percentage of UK population though?

vivatifosi

There's a pretty good timeline of events for the early 80s recession at bized:

http://www.bized.co.uk/dataserv/chron/kf80.htm

System

People must be slowly grasping that comparing with any previous recession is meaningless, countless factors are different.