We are now officially in recession - but recessions are not new and they do end!

The media have already started to "state the obvious" today, confirming to us the general public a fact we have probably know for some months now. The UK is officially in recession!

But what does it mean? What should we do? What has happened in the past?

I was in our Ware office this morning and came across some historic documentation, some it dating back to the 1800's about the dealings of the Building Society. I was drawn to a quote from the directors’ report in the 1970 report and accounts, which lead me to look at what was said in other recessionary years. The following quotes are from just such reports, including one from me, which will be in our 2008 report that will be going out to members shortly:

1970 - "The year has been one of uncertainty nationally and it is difficult to forecast the future trend of interest rates. However, it has become clear that Building Societies are now regarded as a secure investment for savings and the movement generally is receiving a record inflow of investment money."

1991 - "The difficulties within the economy that prevailed throughout 1990 intensified during 1991. Although Bank base rates reduced seven times during the year thereby allowing mortgage rates to fall by almost 4%, the damage inflicted to the housing market was all too evident. Falling House prices were recorded in many parts of the Country."

2008 - "In my opinion it has been an extremely difficult year for consumers, where not only did we all have to come to terms with rising inflation driven predominantly by food and energy prices, but we have also had to contend with an uncomfortable level of uncertainty about such things previously regarded as sacrosanct. I am talking of course about the banking and finance industry that has faced a period of unprecedented negativity. The phrase “you can bank on it” may not have quite the same meaning to us all going forward. Against a backdrop of financial meltdown, quite literally for some institutions, it is appropriate that I recount some of the key financial issues facing us all and how Saffron Building Society has coped and will continue to do so in arguably the most uncharted financial waters in documented history."

Recessions will always happen; it is unreasonable to assume that constant growth and economic buoyancy will continue ad infinitum. But if we all hold our nerve, save more, borrow less and spend wisely, this recession will, like all those that have come before, become history and the media will have to find some other source of bad news in an attempt to dampen our spirits.