Editing Economy of the United Kingdom (section)

===2009 to 2020===
In March 2009, the Bank of England (BoE) cut interest rates to a then-historic low of 0.5% and began [[quantitative easing]] (QE) to boost lending and shore up the economy.<ref>{{cite news|url=http://news.bbc.co.uk/1/hi/business/7925620.stm|title=UK interest rates lowered to 0.5%|date=5 March 2009|work=BBC News|access-date=2 October 2016}}</ref> The UK exited the [[Great Recession]] in Q4 of 2009 having experienced six consecutive quarters of negative growth, shrinking by 6.03% from peak to trough, making it the longest recession since records began and the deepest since [[World War&nbsp;II]].<ref name="2009dec22"/><ref>{{cite news|url=http://news.bbc.co.uk/1/hi/business/8378129.stm|title=UK economy shrinks less than thought|work=BBC News|date=25 November 2009}}</ref> Support for Labour slumped during the recession, and the [[2010 United Kingdom general election|general election of 2010]] resulted in [[Cameron–Clegg coalition|a coalition government]] being formed by the Conservatives and the [[Liberal Democrats (UK)|Liberal Democrats]].

In 2011, [[Household debt|household]], financial, and business debts stood at 420% of GDP in the UK.{{efn|Compared to 279% in Japan, 253% in France, 209% in the United States, 206% in Canada, and 198% in Germany.}}<ref name="Meyer2012">{{cite book|first=Annette|last=Meyer|title=Value Added / 14 National Labor Forces|url=https://books.google.com/books?id=xTJDv05aRIYC&pg=PA170|year=2012|publisher=Dorrance Publishing|isbn=978-1-4349-7375-7|page=170}}</ref> As the world's [[Heavily indebted poor countries|most indebted country]], spending and investment were held back after the recession, creating [[economic malaise]]. However, it was recognised that [[government borrowing]], which rose from 52% to 76% of GDP, had helped to avoid a [[Great Depression in the United Kingdom|1930s-style depression]].<ref>{{cite news|url=https://www.bbc.co.uk/news/business-15820601|title=UK's debts 'biggest in the world'|first=Robert|last=Peston|website=BBC News|date=21 November 2011|access-date=2 June 2017}}</ref> Within three years of the general election, government cuts aimed at reducing the budget deficit had led to [[public sector]] job losses well into six figures, but the [[private sector]] enjoyed strong jobs growth.

The 10 years following the Great Recession were characterised by extremes. In 2015, employment was at its highest since records began,<ref>{{cite news|last1=Stewart| first1=Heather| last2=Wintour| first2=Patrick| title=UK employment rate hits highest level since records began| url=https://www.theguardian.com/business/2015/feb/18/uk-employment-rate-hits-highest-level-since-records-began| access-date=8 June 2015|newspaper=The Guardian| date=18 February 2015}}</ref> and GDP growth had become the fastest in the [[Group of Seven (G7)]] and Europe,<ref>{{cite news| last=Wholehouse| first=Matthew| title= UK has fastest-growing economy, International Monetary Fund says| url=https://www.telegraph.co.uk/finance/economics/10988849/UK-has-fastest-growing-economy-International-Monetary-Fund-says.html |archive-url=https://ghostarchive.org/archive/20220111/https://www.telegraph.co.uk/finance/economics/10988849/UK-has-fastest-growing-economy-International-Monetary-Fund-says.html |archive-date=11 January 2022 |url-access=subscription |url-status=live|date=24 July 2014|  newspaper=The Telegraph |access-date=8 June 2015| location=London}}{{cbignore}}</ref> but [[workforce productivity]] was the worst since the 1820s, with any growth attributed to a fall in working hours.<ref>{{cite news|url=https://www.ft.com/content/edcb9224-f1ff-11e7-b220-857e26d1aca4 |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/edcb9224-f1ff-11e7-b220-857e26d1aca4 |archive-date=10 December 2022 |url-access=subscription |url-status=live|title=UK productivity grows at quickest pace in six years|first=Gavin|last=Jackson|date=5 January 2018|website=Financial Times|access-date=6 January 2018}}</ref> Output per hour worked was 18% below the average for the rest of the G7.<ref>{{cite web|url=https://www.theguardian.com/business/2016/feb/18/uk-productivity-gap-widens-to-worst-level-since-records-began|title=UK productivity gap widens to worst level since records began|work=The Guardian|date=18 February 2016|access-date=7 April 2016}}</ref> Real wage growth was the worst since the 1860s, and the [[Governor of the Bank of England]] described it as a lost decade.<ref>{{cite news|url=https://www.ft.com/content/c0c36268-bb0d-11e6-8b45-b8b81dd5d080 |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/c0c36268-bb0d-11e6-8b45-b8b81dd5d080 |archive-date=10 December 2022 |url-access=subscription|title= UK suffering 'first lost decade since 1860s', Carney says|date=6 December 2016|access-date=6 December 2016|first=Chris|last=Giles|newspaper=Financial Times}}{{subscription required}}</ref> Wages fell by 10% in real terms in the eight years to 2016, whilst they grew across the OECD by an average of 6.7%.<ref>{{cite news|url=https://www.theguardian.com/money/2016/jul/27/uk-joins-greece-at-bottom-of-wage-growth-league-tuc-oecd|title= UK joins Greece at bottom of wage growth league|date=27 July 2016|access-date=31 October 2016|newspaper=The Guardian|first1=Katie|last1=Allen|first2=Larry|last2=Elliott}}</ref> For 2015 as a whole,<ref>{{cite news|url=https://www.telegraph.co.uk/business/2016/03/31/uks-current-account-deficit-jumps-to-eye-watering-record-high/ |archive-url=https://ghostarchive.org/archive/20220111/https://www.telegraph.co.uk/business/2016/03/31/uks-current-account-deficit-jumps-to-eye-watering-record-high/ |archive-date=11 January 2022 |url-access=subscription |url-status=live|title=UK's current account deficit jumps to 'eye watering' record high|date=31 March 2016|access-date=7 April 2016|work=The Telegraph}}{{cbignore}}</ref> the [[Current account (balance of payments)|current account]] deficit rose to a record high of 5.2% of GDP (£96.2bn),<ref>{{cite news|url=https://www.bbc.co.uk/news/business-35931968|title=UK current account deficit at new high|date=31 March 2016|access-date=7 July 2016|work=BBC News}}</ref> the highest in the developed world.<ref>{{cite news|url=http://news.sky.com/story/the-16322bn-current-account-deficit-mystery-10411813|publisher=Sky News|title=The £22bn current account deficit mystery|date=5 July 2016|access-date=10 July 2016|first=Ed|last=Conway}}</ref> In Q4 2015, it exceeded 7%, a level not witnessed during peacetime since records began in 1772.<ref name="aep">{{cite news|url=https://www.telegraph.co.uk/business/2016/03/31/britain-courts-fate-on-brexit-with-worst-external-deficit-in-his/ |archive-url=https://ghostarchive.org/archive/20220111/https://www.telegraph.co.uk/business/2016/03/31/britain-courts-fate-on-brexit-with-worst-external-deficit-in-his/ |archive-date=11 January 2022 |url-access=subscription |url-status=live|title=Britain courts fate on Brexit with worst external deficit in history|first=Ambrose|last=Evans-Pritchard|newspaper=The Telegraph|date=31 March 2016|access-date=23 October 2016}}{{cbignore}}</ref> The UK relied on foreign investors to plug the shortfall in its [[balance of payments]].<ref>{{cite news|url=https://www.theguardian.com/business/2016/mar/31/uk-economy-growth-record-trade-deficit|title= Current account deficit hits record high as GDP revised higher|first=Katie|last=Allen|newspaper=The Guardian|date=21 March 2016|access-date=23 October 2016}}</ref> Homes had become [[affordability of housing in the United Kingdom|less affordable]], a problem exacerbated by QE, without which house prices would have fallen by 22%, according to the BoE's own analysis.<ref>{{cite magazine|title=After the Fall|date=9 September 2018|magazine=The Sunday Times Magazine|first=John|last=Lanchester|page=29|url=https://www.thetimes.com/world/us-world/article/after-the-fall-john-lanchester-on-the-decade-of-doom-that-followed-the-2008-financial-crash-cxscrmmj9}}</ref>

A rise in unsecured household debt added to questions over the [[Sustainability#Economic sustainability|sustainability]] of the [[economic recovery]] in 2016.<ref>{{cite news|url=https://www.independent.co.uk/money/is-britain-facing-a-debt-disaster-a6808086.html|title=Is the UK facing a debt disaster?|first=Simon|last=Read|date=13 January 2016|access-date=8 July 2016|work=Independent}}</ref><ref>{{cite news|url=https://www.theguardian.com/business/2015/dec/09/economic-recovery-reliant-consumer-debt-bcc-downgrades-growth-forecast|title=Recovery 'too reliant on consumer debt' as BCC downgrades forecast|date=9 December 2015|access-date=8 July 2016|first=Heather|last=Stewart|work=The Guardian}}</ref><ref>{{cite news|url=https://next.ft.com/content/5d6ecd5c-afc8-11e5-b955-1a1d298b6250|work=Financial Times|title=Economists' forecasts: Fears over balance of recovery|date=3 January 2016|access-date=8 July 2016|first1=Emily|last1=Cadman|first2=Chris|last2=Giles}}{{subscription required}}</ref> The BoE insisted there was no cause for alarm,<ref>{{cite news|url=https://www.telegraph.co.uk/finance/economics/12095431/Britains-recovery-is-not-driven-by-debt-says-Mark-Carney.html |archive-url=https://ghostarchive.org/archive/20220111/https://www.telegraph.co.uk/finance/economics/12095431/Britains-recovery-is-not-driven-by-debt-says-Mark-Carney.html |archive-date=11 January 2022 |url-access=subscription |url-status=live|title=Britain's recovery is not driven by debt, says Mark Carney|date=12 January 2016|access-date=8 July 2016|first=Mehreen|last=Khan|work=The Telegraph}}{{cbignore}}</ref> despite having said two years earlier that the recovery was "neither balanced nor sustainable".<ref>{{cite news|url=https://www.theguardian.com/business/2014/feb/12/interest-rates-economic-recovery-unsustainable|title=Interest rates on hold as Bank says recovery 'unsustainable'|date=12 February 2014|access-date=8 July 2016|work=The Guardian|first1=Larry|last1=Elliott|first2=Angela|last2=Monaghan}}</ref>{{efn|It was still very unbalanced,<ref>{{cite news|url=https://www.theguardian.com/business/2017/jan/01/uk-economy-will-fare-better-in-2017-than-forecasters-predict|title=Why the UK economy could fare better in 2017 than forecasters predict|first=Katie|last=Allen|date=1 January 2017|access-date=13 June 2017|website=The Guardian}}</ref> with [[Consumption (economics)|consumption]] accounting for 100% of growth in that year.<ref>{{cite news|url=http://www.newstatesman.com/politics/june2017/2017/04/economic-slowdown-another-reason-theresa-may-called-early-election|title=The economic slowdown is another reason Theresa May called an early election|first=George|last=Eaton|date=28 April 2017|access-date=8 June 2017|website=New Statesman}}</ref>}} Following the [[2016 United Kingdom European Union membership referendum|UK's 2016 decision]] to leave the [[European Union]], the BoE cut interest rates to a new historic low of 0.25% for just over a year. It also increased the amount of QE since the start of the Great Recession to £435bn.<ref>{{cite news|title=UK interest rates cut to 0.25%|url=https://www.bbc.co.uk/news/business-36976528|work=BBC News|date=4 August 2016|access-date=2 October 2016}}</ref> By Q4 2018 net borrowing in the UK was the highest in the OECD at 5% of GDP.{{efn|For comparison, Germany saved 9% of GDP and Russia saved 5%, while Japan, Greece, Spain, Italy and China saved between 1% and 3%.}} Households had been in deficit for an unprecedented nine quarters in a row. Since the Great Recession, the country was no longer making a profit on its foreign investments.<ref>{{cite news|url=https://www.ft.com/content/9afd1596-61d3-11e9-a27a-fdd51850994c |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/9afd1596-61d3-11e9-a27a-fdd51850994c |archive-date=10 December 2022 |url-access=subscription|title=UK's low national savings rate raises fear of trouble ahead|date=22 April 2019|first=Chris|last=Giles|website=Financial Times}}</ref> The Great Recession had a long term effect on UK's growth; GDP growth slowed from an annual average of 3.0% between 1993 and 2007 to 1.5% between 2009 and 2023, while labour productivity growth slowed from an annual average of 1.9% between 1993 and 2008 to 0.4% between 2008 and 2023. As of early 2024, average wages in the UK adjusted by inflation are roughly the same as in 2008.<ref name=":2">{{Cite web |last=Harari |first=Daniel |date=16 July 2024 |title=Low growth: The economy’s biggest challenge |url=https://commonslibrary.parliament.uk/low-growth-the-economys-biggest-challenge/#:~: |access-date=16 April 2025 |website=House of Commons Library}}</ref>