Editing Economy of the United Kingdom (section)

===1979 to 1997===
A new period of [[neo-liberal]] economics began with this election. During the 1980s, many state-owned industries and utilities were [[privatised]], taxes cut, trade union reforms passed and markets deregulated. GDP fell by 5.9% initially,<ref>Phillip Inman, "Reports of recovery much exaggerated, says CBI", The Guardian (UK), 15 June 2009, p. 21.</ref> but growth subsequently returned and rose to an annual rate of 5% at its peak in 1988, one of the highest rates of any country in Europe.<ref name="imf">{{cite web |url=http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001 |title=Edit/Review Countries |publisher=Imf.org |date=29 April 2003 |access-date=5 September 2012 |url-status=dead|archive-url=https://web.archive.org/web/20100611172746/http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001 |archive-date=11 June 2010 }}</ref><ref name=ons>The ONS figures, reproduced by the Local Government Association, [http://www.lga.gov.uk/lga/aio/1215871 "From Recession to recovery"], November 2008. Retrieved 13-05-09, p. 7, are slightly lower, giving 4.5% in 1988. {{webarchive |url=https://web.archive.org/web/20111102003004/http://www.lga.gov.uk/lga/aio/1215871 |date=2 November 2011 }}</ref>

Thatcher's modernisation of the economy was far from trouble-free; her battle with inflation, which in 1980 had risen to 21.9%, resulted in a substantial increase in unemployment from 5.3% in 1979 to over 10.4% by the start of 1982, peaking at nearly 11.9% in 1984 – a level not seen in Britain since the [[Great Depression]].<ref name="HowBritainChanged">{{cite web|url=https://www.theguardian.com/politics/datablog/2013/apr/08/britain-changed-margaret-thatcher-charts|work=The Guardian|title=How Britain changed under Margaret Thatcher|date=8 April 2013|access-date=7 April 2016}}</ref> The rise in unemployment coincided with the [[early 1980s recession|early 1980s global recession]], after which UK GDP did not reach its pre-recession rate until 1983. In spite of this, Thatcher [[1983 United Kingdom general election|was re-elected]] in June 1983 with a landslide majority. Inflation had fallen to 3.7%, while interest rates were relatively high at 9.56%.<ref name="HowBritainChanged"/> The increase in unemployment was largely due to the government's [[economic policy]] which resulted in the closure of outdated factories and [[Coal mining in the United Kingdom#Decline in volume|coal pits]]. Manufacturing in England and Wales declined from around 38% of jobs in 1961 to around 22% in 1981.<ref>{{cite web|url=http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/170-years-of-industry/170-years-of-industrial-changeponent.html |archive-url=http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/170-years-of-industry/170-years-of-industrial-changeponent.html |url-status=dead|archive-date=5 January 2016 |title=170 Years of Industrial Change across England and Wales |date=5 June 2013 |author=ONS |website=The National Archives |access-date=6 December 2016 }}</ref> This trend continued for most of the 1980s, with newer industries and the service sector enjoying significant growth. Many jobs were also lost as manufacturing became more efficient and fewer people were required to work in the sector. Unemployment had fallen below 3&nbsp;million by the time of Thatcher's third successive election victory in June 1987; and by the end of 1989 it was down to 1.6&nbsp;million.<ref>{{cite news|url=http://news.bbc.co.uk/1/hi/uk_politics/vote_2005/basics/4393313.stm |title=UK Politics &#124; The Basics &#124; past_elections &#124; 1983: Thatcher triumphs again |work=BBC News |date=5 April 2005 |access-date=5 September 2012}}</ref>

Britain's economy slid into [[Early 1990s recession|another global recession]] in late 1990; it shrank by a total of 6% from peak to trough,<ref name="2009dec22">{{cite news|url=https://www.theguardian.com/business/2009/dec/22/britain-still-in-recession|title=UK recession longest and deepest since war, says ONS|work=The Guardian|first=Larry|last=Elliott|date=22 December 2009|access-date=9 July 2009}}</ref> and unemployment increased from around 6.9% in spring 1990 to nearly 10.7% by the end of 1993. However, inflation dropped from 10.9% in 1990 to 1.3% three years later.<ref name="HowBritainChanged"/> The subsequent economic recovery was extremely strong, and unlike after the early 1980s recession, the recovery saw a rapid and substantial fall in unemployment, which was down to 7.2% by 1997,<ref name="HowBritainChanged"/> although the popularity of the Conservative government had failed to improve with the economic upturn. The government won a fourth successive election in 1992 under [[John Major]], who had succeeded Thatcher in November 1990, but soon afterwards came [[Black Wednesday]], which damaged the Conservative government's reputation for economic competence, and from that stage onwards, the [[Labour Party (UK)|Labour Party]] was ascendant in the opinion polls, particularly in the immediate aftermath of [[Tony Blair]]'s election as party leader in July 1994 after the sudden death of his predecessor [[John Smith (Labour Party leader)|John Smith]].

Despite two recessions, wages grew consistently by around 2% per year in [[real terms]] from 1980 until 1997, and continued to grow until 2008.<ref>{{cite web|url=http://blogs.lse.ac.uk/politicsandpolicy/real-wages-and-living-standards-the-latest-uk-evidence/|title=Real wages and living standards: the latest UK evidence|date=6 April 2015|access-date=31 October 2016|first=Stephen|last=Machin|publisher=London School of Economics}}</ref>