Background: Unlike other west European countries, there is a long-term trend of rising alcohol consumption and mortality in England. Whether drinking will rise or fall during the current recession is widely debated. We examined how the recession affected alcohol use in adults in England using individual-level data. Methods: We analysed a nationally representative sample of non-institutionalized white persons aged 20–60 years from seven waves of the Health Survey for England, 2004–2010 (n = 36 525), to assess trends in alcohol use and frequency before, during and after the recession and in association with unemployment, correcting for possible changes in sample composition and socio-demographic confounders. The primary analysis compared 2006/7 with 2008/9, following the official onset of the UK recession in early 2008. Results: During England’s recession, there was a significant decrease in frequent drinking defined as drinking four or more days in the past week (27.1% in 2006 to 23.9% in 2009, P < 0.001), the number of units of alcohol imbibed on the heaviest drinking day (P < 0.01) and the number of days that individuals reported drinking over the past seven days (P < 0.01). However, among current drinkers who were unemployed there was a significantly elevated risk of binge drinking in 2009 and 2010 (odds ratio = 1.64, 95% confidence interval: 1.22–2.19, P = 0.001) that was not previously observed in 2004–2008 (1.03, 0.76–1.41; test for effect heterogeneity: P = 0.036). Conclusions: England’s recession was associated with less hazardous drinking among the population overall, but with rises in binge drinking among a smaller high-risk group of unemployed drinkers.