section_path: History/2009 to 2020
section_name: 2009 to 2020
paragraph_text: 2009 to 2020
  
  In March 2009, the Bank of England (BoE) cut interest rates to a then-historic low of 0.5% and began quantitative easing (QE) to boost lending and shore up the economy. The UK exited the Great Recession in Q4 of 2009 having experienced six consecutive quarters of negative growth, shrinking by 6.03% from peak to trough, making it the longest recession since records began and the deepest since World War II. Support for Labour slumped during the recession, and the general election of 2010 resulted in a coalition government being formed by the Conservatives and the Liberal Democrats.
  
  In 2011, household, financial, and business debts stood at 420% of GDP in the UK. As the world's most indebted country, spending and investment were held back after the recession, creating economic malaise. However, it was recognised that government borrowing, which rose from 52% to 76% of GDP, had helped to avoid a 1930s-style depression. Within three years of the general election, government cuts aimed at reducing the budget deficit had led to public sector job losses well into six figures, but the private sector enjoyed strong jobs growth.
  
  The ten years following the Great Recession were characterised by extremes. In 2015, employment was at its highest since records began, and GDP growth had become the fastest in the Group of Seven (G7) and Europe, but workforce productivity was the worst since the 1820s, with any growth attributed to a fall in working hours. Output per hour worked was 18% below the average for the rest of the G7. Real wage growth was the worst since the 1860s, and the Governor of the Bank of England described it as a lost decade. Wages fell by 10% in real terms in the eight years to 2016, whilst they grew across the OECD by an average of 6.7%. For 2015 as a whole, the current account deficit rose to a record high of 5.2% of GDP (£96.2bn), the highest in the developed world. In Q4 2015, it exceeded 7%, a level not witnessed during peacetime since records began in 1772. The UK relied on foreign investors to plug the shortfall in its balance of payments. Homes had become less affordable, a problem exacerbated by QE, without which house prices would have fallen by 22%, according to the BoE's own analysis.
  
  A rise in unsecured household debt added to questions over the sustainability of the economic recovery in 2016. The BoE insisted there was no cause for alarm, despite having said two years earlier that the recovery was "neither balanced nor sustainable". Following the UK's 2016 decision to leave the European Union, the BoE cut interest rates to a new historic low of 0.25% for just over a year. It also increased the amount of QE since the start of the Great Recession to £435bn. By Q4 2018 net borrowing in the UK was the highest in the OECD at 5% of GDP. Households had been in deficit for an unprecedented nine quarters in a row. Since the Great Recession, the country was no longer making a profit on its foreign investments. The Great Recession had a long term effect on UK's growth; GDP growth slowed from an annual average of 3.0% between 1993 and 2007 to 1.5% between 2009 and 2023, while labour productivity growth slowed from an annual average of 1.9% between 1993 and 2008 to 0.4% between 2008 and 2023. As of early 2024, average wages in the UK adjusted by inflation are roughly the same as in 2008.
  
  In March 2009, the Bank of England (BoE) cut interest rates to a then-historic low of 0.5% and began quantitative easing (QE) to boost lending and shore up the economy. The UK exited the Great Recession in Q4 of 2009 having experienced six consecutive quarters of negative growth, shrinking by 6.03% from peak to trough, making it the longest recession since records began and the deepest since World War II. Support for Labour slumped during the recession, and the general election of 2010 resulted in a coalition government being formed by the Conservatives and the Liberal Democrats.
  
  In 2011, household, financial, and business debts stood at 420% of GDP in the UK. As the world's most indebted country, spending and investment were held back after the recession, creating economic malaise. However, it was recognised that government borrowing, which rose from 52% to 76% of GDP, had helped to avoid a 1930s-style depression. Within three years of the general election, government cuts aimed at reducing the budget deficit had led to public sector job losses well into six figures, but the private sector enjoyed strong jobs growth.
  
  The ten years following the Great Recession were characterised by extremes. In 2015, employment was at its highest since records began, and GDP growth had become the fastest in the Group of Seven (G7) and Europe, but workforce productivity was the worst since the 1820s, with any growth attributed to a fall in working hours. Output per hour worked was 18% below the average for the rest of the G7. Real wage growth was the worst since the 1860s, and the Governor of the Bank of England described it as a lost decade. Wages fell by 10% in real terms in the eight years to 2016, whilst they grew across the OECD by an average of 6.7%. For 2015 as a whole, the current account deficit rose to a record high of 5.2% of GDP (£96.2bn), the highest in the developed world. In Q4 2015, it exceeded 7%, a level not witnessed during peacetime since records began in 1772. The UK relied on foreign investors to plug the shortfall in its balance of payments. Homes had become less affordable, a problem exacerbated by QE, without which house prices would have fallen by 22%, according to the BoE's own analysis.
  
  A rise in unsecured household debt added to questions over the sustainability of the economic recovery in 2016. The BoE insisted there was no cause for alarm, despite having said two years earlier that the recovery was "neither balanced nor sustainable". Following the UK's 2016 decision to leave the European Union, the BoE cut interest rates to a new historic low of 0.25% for just over a year. It also increased the amount of QE since the start of the Great Recession to £435bn. By Q4 2018 net borrowing in the UK was the highest in the OECD at 5% of GDP. Households had been in deficit for an unprecedented nine quarters in a row. Since the Great Recession, the country was no longer making a profit on its foreign investments. The Great Recession had a long term effect on UK's growth; GDP growth slowed from an annual average of 3.0% between 1993 and 2007 to 1.5% between 2009 and 2023, while labour productivity growth slowed from an annual average of 1.9% between 1993 and 2008 to 0.4% between 2008 and 2023. As of early 2024, average wages in the UK adjusted by inflation are roughly the same as in 2008.
  
  In March 2009, the Bank of England (BoE) cut interest rates to a then-historic low of 0.5% and began quantitative easing (QE) to boost lending and shore up the economy. The UK exited the Great Recession in Q4 of 2009 having experienced six consecutive quarters of negative growth, shrinking by 6.03% from peak to trough, making it the longest recession since records began and the deepest since World War II. Support for Labour slumped during the recession, and the general election of 2010 resulted in a coalition government being formed by the Conservatives and the Liberal Democrats.
  
  In 2011, household, financial, and business debts stood at 420% of GDP in the UK. As the world's most indebted country, spending and investment were held back after the recession, creating economic malaise. However, it was recognised that government borrowing, which rose from 52% to 76% of GDP, had helped to avoid a 1930s-style depression. Within three years of the general election, government cuts aimed at reducing the budget deficit had led to public sector job losses well into six figures, but the private sector enjoyed strong jobs growth.
  
  The ten years following the Great Recession were characterised by extremes. In 2015, employment was at its highest since records began, and GDP growth had become the fastest in the Group of Seven (G7) and Europe, but workforce productivity was the worst since the 1820s, with any growth attributed to a fall in working hours. Output per hour worked was 18% below the average for the rest of the G7. Real wage growth was the worst since the 1860s, and the Governor of the Bank of England described it as a lost decade. Wages fell by 10% in real terms in the eight years to 2016, whilst they grew across the OECD by an average of 6.7%. For 2015 as a whole, the current account deficit rose to a record high of 5.2% of GDP (£96.2bn), the highest in the developed world. In Q4 2015, it exceeded 7%, a level not witnessed during peacetime since records began in 1772. The UK relied on foreign investors to plug the shortfall in its balance of payments. Homes had become less affordable, a problem exacerbated by QE, without which house prices would have fallen by 22%, according to the BoE's own analysis.
  
  A rise in unsecured household debt added to questions over the sustainability of the economic recovery in 2016. The BoE insisted there was no cause for alarm, despite having said two years earlier that the recovery was "neither balanced nor sustainable". Following the UK's 2016 decision to leave the European Union, the BoE cut interest rates to a new historic low of 0.25% for just over a year. It also increased the amount of QE since the start of the Great Recession to £435bn. By Q4 2018 net borrowing in the UK was the highest in the OECD at 5% of GDP. Households had been in deficit for an unprecedented nine quarters in a row. Since the Great Recession, the country was no longer making a profit on its foreign investments. The Great Recession had a long term effect on UK's growth; GDP growth slowed from an annual average of 3.0% between 1993 and 2007 to 1.5% between 2009 and 2023, while labour productivity growth slowed from an annual average of 1.9% between 1993 and 2008 to 0.4% between 2008 and 2023. As of early 2024, average wages in the UK adjusted by inflation are roughly the same as in 2008.