The UK is in its third recession since the global financial crisis of 2008, with the economy shrinking by 1.2 per cent last month and the unemployment rate rising to 12.4 per cent.
It has also become the world’s fifth-largest economy.
Key points: Unemployment rate has risen to 12 per cent, up from 11.4% a year ago.
The economy has contracted by 1 per cent in the past year – the worst in more than a decade.
What are the causes?
Unemployment is a common symptom of a recession.
It reflects the number of people out of work and the lack of demand for their services, as well as the impact of government spending cuts and cuts to tax credits.
But economists say many of the main causes are the result of policy changes.
In the case of the UK economy, the government has increased its tax credits, introduced an “insurance” system for people with high household debt, slashed the number who can claim child benefit, and imposed a 15-year cap on the value of home-ownership.
What is a financial crisis?
The Financial Crisis Inquiry Commission (FCIC) said the crisis began in 2008, when a global financial meltdown sent the US financial system into crisis.
The UK has experienced four recessions since the 2008 financial crisis.
The recession began in the UK in March 2010, when unemployment reached 9 per cent for the first time.
Unemployment began rising in September 2011.
It fell to 7.5 per cent by December last year.
In February this year, the unemployment reached 8.3 per cent as inflation rose to over 7 per cent a year on year.
But it was still above the pre-crisis peak of 5.5.
In July last year, unemployment hit a record 10 per cent and the number had reached 10.3 million people by the end of the year.
The government has been trying to stem the tide by cutting welfare and welfare benefits.
It cut the benefit cap in July this year and is reducing tax credits and the cap on child benefit.
It also has cut the rate of unemployment benefits.
The FCO said the UK was in its second recession in four years, and the country has been hit harder by the global economic downturn.
The Government also introduced a 15 year cap on house prices, meaning that the average value of homes in the country increased by $100,000 per year.
Why did it start the crisis?
Britain’s housing market has been battered by the collapse in property values, which saw property values fall by more than 10 per -cent in 2014.
Property prices in some areas have also been hit by a slump in business investment, which was partly offset by the government’s tax credit cut.
The Bank of England said the recession is being driven by the combination of factors: lower growth, the global downturn, and a lack of private-sector activity.
It said the economic contraction could not be attributed to the introduction of a housing tax credit, and could also not be linked to other factors.
Is the government responsible for the economic downturn?
“The economic downturn is not the result either of the government policies, or the policy decisions of the chancellor, the prime minister or the chancellor’s chief of staff,” the FCO wrote.
What are the effects of the recession?
The recession has had devastating consequences for households and businesses.
The number of households without income has increased by nearly a million since March.
Employment has also fallen by over 2 million since the recession started.
“We are seeing a significant drop in the number and quality of jobs, particularly in the private sector, and an increase in the unemployment and underemployment rate,” the bank added.
“These trends are not reflected in the wider economy and are a serious risk to the UK’s recovery.”
Are there other factors behind the recession that the government is not talking about?
The UK government did not respond to requests for comment.
Where do we go from here?
The government is trying to get a grip on the economy, but it is also trying to reduce unemployment, as part of the package of economic reforms that were announced in March this year.
On Thursday, the UK government said it would extend tax credits for up to three months, and cut the tax rate on housing by 25 per cent over four years.
It also plans to introduce a “safety net” for the elderly.
There are also plans for the Government to introduce tax cuts for households with incomes above £150,000, with some families expected to be able to take up to 15 weeks off work.
Why is the UK the worst-hit country in the world for recessions?
The recession started in the US.
The US has had five recessions in the last 30 years, the most recent being a six-month depression in 2003-04.
In Britain, the downturn began in 2009 and the UK suffered its worst