- 21 March 2022
- Posted by: admin_gray
- Category: Property
Written by Sapphire Savvy Women Group.
After the financial crisis hit in 2008, the United Kingdom and the Western world went through their deepest recession since the last World War. After past downturns, we have grown accustomed to the economy, public finances, and private earnings rebounding strongly. but this time this wasn’t the case.
Despite the economy’s long-term growth, the expansion has been modest by ancient standards. As a percentage of the economy, the government’s imbalance remains relatively modest, even though it had gotten to record levels by 2010. As a result of the recession, the UK economy has been impacted to a significant and long-term extent. We face difficult decisions today because of its impact on our earnings.
The UK sector declined below 6% during the first quarter of 2008 and the fourth half of 2009, so it took five years to restore towards its pre-recession size. As of the most recent data, the UK sector is now 11% stronger than it was before the recession. As shown here.
In November 2021, real gross domestic product (GDP) is expected to have increased by 0.9%, compared to a 0.2% gain in October 2021 (revised from 0.1%). This version incorporates monthly data adjustments back to January 2020, in line with the Quarterly National Accounts released on December 22, 2021.
GDP was expected to rise by 0.7 percent in November 2021, surpassing its pre-coronavirus (COVID-19) pandemic level (February 2020) for the first time. Both services and construction are up 1.3 percent from pre-coronavirus levels, while output is still down 2.6 percent.
Part of the reason for this abysmal performance was the initial drop in output, but more critically abysmal productivity after 2008. Measured production per hour increased by only 0.3 percent per year during that period, compared with 2% on average over the past century. The effect on wages has been the most immediate. According to growth rates previously before the crisis (of around 1.4 percent per year), employee wages are still 3% lower than in 2008, and 13% lower than we might have predicted.
Understanding the profits change timeline is crucial. In the last 20 years, there have been four main phases. From 1997 to 2002, the median wage increased by 2.2 percent per year; from 2002 to 2009, by 1.0 percent per year; from 2009 to 2014, by 1.8 percent per year; and from 2014 to 2017, by 1.5 percent per year.
What came out of this?
As a result, the government has returned to a budget deficit of pre-crisis levels. Nevertheless, a massive increase in debt has resulted from all the deficits that the government has run in the meantime. The amount of debt is now nearly £1 trillion higher than it was before the crisis, accounting for 50% of the country’s gross domestic product.
The decade we just completed, and continue to complete, has been an incredible one. A flurry of records has been broken by the UK economy, but not all of them are good: record low wages growth, record low interest rates, record poor productivity growth, and record public borrowing followed by record expenditure cuts. Employment levels are very high, and the gap between rich and poor has narrowed considerably despite how it appears, but the gap between elderly and young has increased and widened. In the coming decade, there will be no shortage of difficult choices to be made due to public debt at double its pre-crisis levels, weak economic growth, and an aging population.
The Great Recession had a significant impact on our economy, and we have made significant progress in recovering from it; our sector is now 11 percent stronger than it was prior to the crisis.
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