Put recovery into perspective
The strength of the economic recovery has taken economists and policy-makers by surprise. Some 18 quarters have passed since the UK's pre-recession GDP peak in the first quarter of 2008 and only half of the output lost during the downturn has been recouped to date.
This represents a weaker economic recovery than occurred during the Great Depression (1930-1934). Back then, the UK economy experienced a peak-to-trough recession of 7.6% which was deeper than the 6.2% decline in 2008/09.
However, by Q1 1934, some 16 quarters after the pre-recession peak (Q1 1930), all of the lost output had been recovered. After 18 quarters the UK economy was 2.1% larger than it was before the Great Depression began. Similarly, four years after the pre-recession peak (Q2 1979) in the early 1980s recession all of the lost output had been recouped.
Now, however, 18 quarters have elapsed since the pre-recession peak in the latest downturn and the UK economy is still 3.1% smaller than it was in Q1 2008. Indeed, it is likely that it will be 2014 before UK output returns to its 2008 peak. This represents a lengthy six-year economic recovery.