UK News
Insights from the UK and beyond
from The Great Debate UK:
Why is the UK still in recession when the U.S. isn’t?
Recent U.S. gross domestic product data show the world's biggest economy emerged from recession in the third quarter, while in the UK data show that in the same period Britain's economy contracted.
British economist and author John Kay theorizes that Britain is mired in its worst recession on record in part because government support has not been evenly distributed across sectors.
"We've poured money into the financial sector -- by and large the financial sector in Britain is doing OK," he said. "But very little of that is getting through to small and medium-size businesses out there in the rest of the economy."
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The Wall
Countries differ. It would be unrealistic to expect all countries to march in lockstep. For example, I still do a double take every time I hear someone here refer to the “last recession in 1990″ – as someone whose customers were mostly overseas, I struggle to remember that in here the UK the tech crash did not infect the wider economy as it did elsewhere.
As to small businesses, it’s difficult – clearly some of them will have been given credit they shouldn’t have been given in the first place, and will now have to go to the wall. Giving government largesse to them would merely postpone the day of reckoning. On the other hand, it’s probably at least partly true that the banks no longer have enough people who can accurately assess the creditworthiness of small businesses who want loans. So some babies are likely to be thrown out with the bathwater.