While many commentators expect the London 2012 Olympics to provide a temporary bump to growth in the current quarter, growth is expected to fall back in subsequent quarters.
Indeed, reports suggest the Bank of England is poised to scale back its expectations for UK economic growth when its latest quarterly Inflation Report is published later today (Wednesday 8 August 2012).
Taking a longer-term view, how likely is it that the UK economy can get back to where it once was?
Mervyn King: Economy is engaged in a 'long-term project to get back to where we were'
The widespread concern that the UK economy would appear to be going nowhere is shared by Bank of England Governor Mervyn King.
King recently told the Treasury Select Committee that the economy is engaged in a "a long-term project to get back to where we were." King said:
I don't think we're yet half way through this. [...] My estimate of how long it will take to recover is expanding all the time. We have to regard this as a long-term project to get back to where we were, but we're nowhere near starting that yet. We're in a deep crisis with enormous challenges.But is getting back to where we were even possible any more?
Could the global financial crisis and its aftershocks have changed things irrevocably?
- XpertHR's August 2012 economic commentary article looks in detail at the possibility that we could be facing a long-haul period of economic austerity measures - which could consequently bear down on economic growth for a protracted period - and weighs up whether the economy can hope to "get back to where we were."