From 1991 to 2003, the Japanese economy paid dearly for the bursting of the speculative bubble that had formed in the 1980s. It suffered particularly weak annual growth (1.14% on average) and monetary deflation , then a banking crisis in 1997, which weighed down consumption and investments and led to the bankruptcy of many companies and financial institutions, described as “zombies”.
The same problems – but worse – now threaten the United Kingdom, where average annual growth between 2016 and 2025 is not expected to exceed 0.8%.
London indeed combines this Japanese syndrome with additional economic difficulties: galloping inflation, public services on the verge of collapse (we would not see that here) and a persistent lack of labor on the market. work.
-800 billion
The roots of evil are ancient. The last period of strong growth dates back to the 1990s, under the government of Tony Blair. But this fueled the speculative bubble that burst in 2008, with the bankruptcy of the Northern Rock bank and the costly rescue of other financial institutions.
This was combined with low productivity and budget cuts from Conservative governments, and then with the consequences of Brexit and the Covid-19 pandemic.
A number speaks volumes: the difference in average annual growth in the 1990s (2.7%) and now (0.8%) represents an annual loss of 300 billion pounds (340 billion euros ) in taxes and 800 billion pounds (907 billion euros) in GDP for the British.
Among the G7 member countries, the United Kingdom is the only one whose economy has remained smaller (by default of growth) than before the pandemic, and also appears to be the country for which the IMF’s economic forecasts have changed. the most degraded.
London is now relegated behind Paris (cocorico) as far as the volume of foreign investment in Europe is concerned. Recovering the British economy remains possible, although delicate, but it will require other measures than the perpetual budget cuts to which the Conservatives in power appear addicted.
