In the years that led up to the banking crash banks continued to take on larger bets and consumers continued to borrow against their home values. Growth continued at the rate of about three percent per year between the years 2001 and 2007 during which the period was marked by private equity deals, leverages buyouts, and the City’s anything goes culture.
The past few years that have followed the fallout of the financial crisis has marked the largest dip that has been recorded since after WWII. For a moment there was a short recovery but the economy quickly relapsed again. Since last autumn Britain has been considered to be in a double dip recession which his only the second time in the modern history of the country that this has occurred, and unless situations change it is likely that it will take until 2015 for the economy to stabilize again.
The good news is that people are expecting the economy to recover, which is better than the dismal outlook that shaped the future a few months ago. The main economic weakness of Britain is the fact that there has been a large amount of reliance of debt-driven growth, and the financial sector and business sector has not yet adapted to growth without debt.
In fact, the worst part of the banking crisis is usually identified as the 19 month period that followed the collapse at Northern Rock during September of 2007 up until the G20 summit that was hosted in April of 2009 in London. At this point Gordon Brown chose to partially nationalize Lloyds and the Royal Bank of Scotland allowing the public borrowing to return to more stable and predictable levels in an effort to help reduce the strain on the economy.