GDP stands for gross domestic product, and is a measure of all the economic activity of companies, governments, and people in a country.
In the UK, the Office for National Statistics (ONS) publishes new GDP figures every month, external. However, quarterly figures – covering three months at a time – are considered more important.
Most economists, politicians, and businesses like to see GDP rising steadily.
That’s because it usually means people are spending more, extra jobs are created, more tax is paid, and workers get better pay rises.
When GDP is falling, it means the economy is shrinking – which can be bad news for businesses and workers.
If GDP falls for two quarters in a row, that is known as a recession, which can lead to pay freezes and job losses.