How long will it take for UK gdp to return to its previous peak?
In recent comments to the Treasury Select Committee on economic affairs, Mervyn King, the Governor of the Bank of England, said that “UK economic recovery would be slow and protracted” and added that “It is very important not to lose sight of the fact that growth rates do not tell the whole story. It is the levels that matter”. With increasing signs that the UK economy will return to growth in the current quarter after a deep downturn, the intention appeared to be to damp expectations of a swift return to normality, including the prospect that (even with some rise in growth) interest rates would be raised anytime soon. Indeed, the Governor suggested that there could be further quantitative easing (QE) in November. Recessions associated with financial shocks take longer to end What is the basis for believing that the UK economy will not quickly return to its previous growth path or level? We look at the last three recessions to help assess whether the UK economy is indeed enduring a slo
