The economic upswing that began in 2009 is now the second-longest on record, surpassed only by the 1991-2001 boom. But it has been historically lacklustre, a reminder that shaking off the hangover from a 1930s-style financial crisis is tougher than bouncing back from a recession caused by overheating and high interest rates — the post-war pattern until the crisis. In the 1960s average annual GDP growth was 4.9%, compared with 2.2% this time round. Employment has expanded by a mere 1.4% a year, half the 1980s figure. Income growth, due to the slow rebound and ongoing automation in the internet age, has barely got going this time round.
Viewpoint
“Is there good news to indicate where new growth might originate? Very little… Britain had real hopes of growing a £40bn space industry by 2030 – of which a cornerstone was more than our fair share in the great EU space projects Galileo and Copernicus. Now we are to be excluded from Galileo… British scientific research was expecting to win £10bn more than the UK government contributed to the EU science budget between 2020 and 2027. That prospect is dead, too… The growth model on which we have relied – inward investment booming because Britain is the heart of the world’s greatest free-trade area, married to emergent strengths in high technology dependent on access to that market – is being shattered. There is nothing to put in its place – but our vastly overpriced housing market depends on it continuing. If it does not, it could have the severest of consequences.”
Will Hutton, The Observer