A growing workforce, but is it becoming less efficient?

More than a decade after the global financial crash, the UK still has to face some difficult truths if it is to have any chance of a healthy economic future, writes Chris Blackhurst

Since the collapse of Lehman Brothers, the recovery has been steady but slight (AFP)

The memory plays tricks. Looking back now, to the beginning of this decade just ending, it is easy to forget the extent of the crisis that had befallen us. Sure, we’re feeling the effects of ever-intensifying global pressure, and we’re uncertain about our future place in that world and how our relations with our EU neighbours will unfold. But honestly, they’re as nothing compared with 10 years ago. Then, we’d seen one of the world’s biggest, seemingly most powerful, banks literally collapse. Watching those employees leave Lehman Brothers on 15 September 2008, carrying their belongings in cardboard boxes, it seemed as if we were heading for catastrophe.

That continued to be the dread for some time afterwards, as other banks here, in the US and across the globe, also plummeted. What began with some borrowers defaulting on their sub-prime loans turned into an almighty economic earthquake. “The financial crisis ... was followed by the deepest recession experienced in the UK, and much of the western world, since the Second World War,” wrote Jonathan Cribb and Paul Johnson in their analysis of the emergency for the Institute for Fiscal Studies.

Something as profound as that comes at a price. Of course, employment would suffer, and GDP would falter. Normally, though, history suggests, the recession is short-lived and then we recover. Not this time. “What has proved most remarkable about the crisis and recession, though, was not its initial scale but the persistence of its effects. We had got used to the economy, and with it, the public finances and household incomes, bouncing back strong following previous downturns. That has not happened this time.”