Friday, 18 August 2017

Has the UK recovered from the 2007-08 Financial Crisis?


I read some data from previous years about the UK, I find that before 2008, the UK GDP growth rates were generally above 2.0% and in some years, the UK economy could even have experienced over 4% economic growth rates for several times. However, since 2008, the UK economic growth has been in decline. Although the UK economic growth rates have been turned to be positive since 2010, the average growth rate since 2010 is still slightly below 2%, and it was above 3% only once. Therefore, it is arguably that the UK economic growth trend has been flatter than its before the Financial Crisis. If the trend cannot be as sharp as the period before the Financial Crisis, we may have a reason to believe that the UK economy has not recovered from the crisis.

An economic recession occurs when an economy experiences negative economic growth for two or more consecutive quarters. However, there is not a very clear definition for economic recovery. Economies are different that they will take different lengths of time periods to recover their economies. Moreover, people could have different beliefs about economic recovery. Some people could think once an economy can restart to continue producing positive economic growth, then this economy is recovered.

Since the last economic crisis, the world economic growth trends have generally become flatter than last century. This is because many governments and companies themselves are afraid that faster economic growth could generate more systemic risk, in order to reduce the rate of accumulating systemic risk, they tend to slow down the economic growth rates. Therefore, after the 2008 financial crisis, we see a general decline in the world economic growth trend.

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