Economic Outlook: How is the current financial and economic situation affecting consumers, debtors and creditors

consumer-finance||38finance||0financial-markets-and-institutions||38justice-and-legal-affairs||56public-policy||0
Sector: Consumer Finance | Finance | Financial markets and Institutions | Justice and Legal Affairs | Public Policy
Published: December, 2011
Document type: Presentation | Staff publication 
Tagged: analysis of economic developments forecasting UK

This analysis by London Economics offers new insights into the current economic crisis. Key economic indicators suggest recovery long way off. In previous UK recessions, output recovered relatively quickly after modest falls. This recession is deeper and longer lasting that previous recessions, with no recovery in sight. Growth between 2005 and 2008 was driven by the financial services sector (and the government sector to a lesser extent). The rest of the economy was already declining between 2005 and 2008. So far in the recovery, the government sector accounts for 26% of growth, which is likely to fall going forward. The erosion of consumer incomes is likely to offer a limited source of growth. This leaves the export driven sector as offering the only growth prospects.