Britain's in a recession, but what is it?

For ages people have been talking about money worries and the credit crunch, and now another strange word has hit the headlines.

The latest government figures show that Britain's on the edge of something called a RECESSION.

BUT WHAT IS IT?

Clothes, food, cars... we make and sell loads of things in the UK.

The more we sell, the more money the country makes. When that happens the economy grows.

And for a long time it's all been going quite well.

For the past 16 years Britain's economy has either stayed the same, or been growing.

But recently countries across the world have been hit by a cash crisis that people are calling the CREDIT CRUNCH.

What's so scary about the credit crunch?

For ages it's seemed like a big scary monster hanging over us all, but not actually doing anything.

But now official figures seem to show how badly Britain's being affected.

In the last three months there's been a FALL in the number of things Britain has made or sold, like food, cinema tickets and cars.

That means for the first time in years our economy is shrinking instead of growing.

And if this keeps happening until the end of the year, then the country will officially be in a recession.

WHAT WILL HAPPEN?

Most people won't have as much to spend as they used to, so instead of buying things they'll be more likely to make do with what they've already got.

This means it'll be harder for shops and businesses to make money, and pay people to work for them.

If all that does happen a lot of people will be worried about losing their jobs.

WHEN WILL IT END?

No-one knows for sure.

But some experts say it could be 2010 before the British economy starts growing again.