The Bank of England has today warned that the UK is facing its longest recession since the 1920s. It has also raised interest rates to 3% from 2.25%, its highest for 14 years.
A recession is defined as when a country's economy shrinks for two three-month periods in a row. The growth of the economy is measured by the country's Gross Domestic Product (GDP), which is the value of the goods and services produced.
If things are going well, the value of goods is going up, so for example UK farmers are making profits from their cattle and crops, and that's happening across all sectors, GDP rises, and the economy is, generally, in good shape. In a recession, the value for things produced in the UK goes down, and the economy shrinks.
