Stagnation Chart 5: GDP Per Capita
It is fairly well known that UK GDP is still around 2.6% below its pre-recession peak of Q1 2008 – an unprecedentedly weak recovery. But even that grim statistic underplays how poor our economic performance has been as it does not take account of population growth. The chart below shows real GDP per capita (or national income per person) since Q1 2008.
GDP per capita is 6.2% below it’s level of 5 years ago. As the ONS makes clear this is a very different picture to previous recoveries.
In the recoveries of the 1980s and the 1990s, GDP pre capita (by this point in the cycle) has up around 10% on pre-recession levels. Even in the 1970s it was up around 5%.
Taking current OBR growth forecast (and ONS population growth forecasts) it will be around 2017 before GDP per capita recovers to 2008 levels. In terms of GDP per capita we truly are experiencing a lost decade. This is a living standards crisis.