In fact, this is the slowest UK ‘recovery’ ON RECORD
A second look at historic GDP data shows the current ‘recovery’ is the slowest on record (which extend back to 1830), rather than the slowest recovery in modern history, as we reported yesterday. This chart shows index numbers of recoveries in GDP from the bottom of each recession to five years later. The current ‘recovery’ is in black: it falls short of all historic recoveries by a very long margin.
Recoveries from recessions from the 1830s to today
The figures are based on the Bank of England’s historic database (up to and including the recovery from 1947); ONS National Accounts are used for the rest, with data for the latest ‘recovery’ now extending to 2014 for the first time, following yesterday’s GDP release. (To keep it tidy, I have defined a recession as two consecutive annual falls in GDP.)
These figures show growth of 8.8% over the five years since 2009, the low point of the latest recession. The average growth over the five years for all other recessions was 16.1%, nearly double today’s effort. On this basis we are even underperforming the disastrous economic age that followed the First World War and the Geddes Axe spending cuts.
It is of great interest that the strongest recovery of them all was the one from 1931 (virtually 20%, four per cent a year), when the approach taken to policy was the reverse of today (and public debt was higher). Truly, this is economic self-harm.