This document summarizes UK economic data from June 2014. It shows that while UK GDP and output in some sectors have recovered since the 2008 financial crisis, overall GDP and construction and production output have not returned to pre-crisis levels. Unemployment is still above pre-crisis levels but hours worked exceeded pre-crisis levels due to population growth. Wage growth has lagged inflation since the crisis. Public debt levels have risen significantly and house price growth has exceeded inflation over the long-term.
Monthly Market Risk Update: April 2024 [SlideShare]
UK Economic Round Up: June 2014
1. UK ECONOMIC ROUND UP
JUNE 2014
These slides reflect the opinions of the author and
not the official position of the ONS
2. -8
-7
-6
-5
-4
-3
-2
-1
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
% away from
pre-downturn
level of output
Downturn
beginning
2008 Q1
Source: ONS
UK GDP
3. -8
-7
-6
-5
-4
-3
-2
-1
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
% away from
pre-downturn
level of output
Downturn
beginning
2008 Q1
Not yet back to
pre-downturn level:
Source: ONS
UK GDP
4. -8
-7
-6
-5
-4
-3
-2
-1
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
% away from
pre-downturn
level of output
Downturn
beginning
2008 Q1
Not yet back to
pre-downturn level:
Source: ONS
UK GDP – Comparisons to Past Downturns
5. -8
-7
-6
-5
-4
-3
-2
-1
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
% away from
pre-downturn
level of output
Downturn
beginning
2008 Q1
Downturn
beginning
1979 Q2
Not yet back to
pre-downturn level:
Source: ONS
UK GDP – Comparisons to Past Downturns
6. -8
-7
-6
-5
-4
-3
-2
-1
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
% away from
pre-downturn
level of output
Downturn
beginning
2008 Q1
Downturn
beginning
1979 Q2
Downturn
beginning
1973 Q2
Not yet back to
pre-downturn level:
Source: ONS
UK GDP – Comparisons to Past Downturns
7. -8
-7
-6
-5
-4
-3
-2
-1
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
% away from
pre-downturn
level of output
Downturn
beginning
2008 Q1
Downturn
beginning
1979 Q2
Downturn
beginning
1973 Q2
Downturn
beginning
1990 Q2
Not yet back to
pre-downturn level:
Source: ONS
UK GDP – Comparisons to Past Downturns
9. % away from
pre-downturn
level of output
Growth with
no downturn
Growth after
downturn
is faster than
pre-downturn
Time
Post Recession Possibilities: Scenario 1
10. % away from
pre-downturn
level of output
Growth after
downturn
is the same as
pre-downturn
Growth with
no downturn
Time
Post Recession Possibilities: Scenario 2
11. % away from
pre-downturn
level of output
Growth after
downturn
is the same as
pre-downturn
Growth with
no downturn
Time
Why is this bad?
Post Recession Possibilities: Scenario 2
12. % away from
pre-downturn
level of output
Growth after
downturn
is the same as
pre-downturn
Growth with
no downturn
Why is this bad?
In this scenario the economy will
not recover “lost output”.
The output that would have
occurred if the economy had
stayed on trend.
Time
Post Recession Possibilities: Scenario 2
13. % away from
pre-downturn
level of output
Growth after
downturn
is slower than
pre-downturn
Growth with
no downturn
Time
Post Recession Possibilities: Scenario 2
14. % away from
pre-downturn
level of output
Growth after
downturn
is slower than
pre-downturn
Growth with
no downturn
This scenario is even worse!
The amount of “lost output”
will be even bigger!
Time
Post Recession Possibilities: Scenario 2
15. • Recent OECD forecasts suggest that the
UK’s trend rate of growth will return to it’s
pre-downturn level
• Thus suggesting the UK recovery may look
like Scenario 2:
Time
% away from
pre-downturn
level of output
OECD Forecasts
17. Index,
March 2008
= 100
Output in the service sector
has recovered and is
now above it’s pre-downturn level:
Source: ONS
75
80
85
90
95
100
105
110
115
120
125 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Index of Services
32. • You may also like:
• http://www.ons.gov.uk/ons/rel/elmr/gdp-and-
the-labour-market/q1-2014--may-gdp-
update/sty-gdp-g7-economies.html
• http://www.ons.gov.uk/ons/rel/elmr/economi
c-review/june-2014/art-june-er.html
If you liked this presentation . . .
Editor's Notes
Why is this bad?
In this scenario the economy will have not recovered “lost output”.
The output that should have occurred if the economy had stayed on trend.
Why is this bad?
In this scenario the economy will have not recovered “lost output”.
The output that should have occurred if the economy had stayed on trend.
Why is this bad?
In this scenario the economy will have not recovered “lost output”.
The output that should have occurred if the economy had stayed on trend.
This scenario is even worse!
Lost output will be even higher!
This scenario is even worse!
Lost output will be even higher!
Pie chart represents how much each sector contributes to the UK economy
Population increase will be a major factor in explaining this.
Population increase will be a major factor in explaining this.
A positive picture – after divergence in recent years, earnings growth and the CPI are closing in on each other.
This means that people’s earnings are growing at a similar rate to price increases.
However, regular pay (earnings excluding bonuses) is still increasing at a slower rate than inflation.
A positive picture – after divergence in recent years, earnings growth and the CPI are closing in on each other.
This means that people’s earnings are growing at a similar rate to price increases.
However, regular pay (earnings excluding bonuses) is still increasing at a slower rate than inflation.