Economic growth in Labour's Noughties was 'weaker than any decade since the war'

By DAILY MAIL REPORTER
Updated:


Britain has experienced its weakest period of economic expansion for any decade since the war, an analysis showed today.

Gross domestic product rose on average by 1.7 per cent annually in real terms, while the Noughties also delivered the worst returns for investors than any decade since the 1930s, the Financial Times said.

The alarming analysis provides a damning indictment of Labour's handling of the economy since it gained power in 1997.

It also seriously undermines ministers' repeated claims that the current recession was preceded by years of prosperity.

car plant

Downing tools: Staff at the Vauxhall Car Plant in Luton on its last day of production in March 2002

The sluggish performance contrasts with the 1960s, when output rose by an average of 3.1 per cent a year.

It also took place against a backdrop of a rising population, a factor that tends to boost output rather than shrink it.

Manufacturing was particularly hard hit as, on average and after adjusting for inflation, output contracted over the decade by 1.2 per cent annually.

That is much worse than the 1970s and 1980s, when output grew 0.6 per cent and one per cent respectively.

In the West Midlands, which is home to much of Britain's manufacturing base, average annual GDP growth nearly halved from two per cent in the 1990s to 1.1 per cent in the following decade.

The South-East has also suffered, with growth falling from an annual rate of 3.2 per cent in the 1990s to 1.8 per cent.

The services sector fared less poorly, with annual output in the past decade at 2.6 per cent, only slightly weaker than the 3 per cent seen in the 1990s peak.

stock market

Downward spiral: Stock market investors have seen an average return of minus 1.8 per cent over the Noughties, the first time they have lost money over a decade since the Great Depression

The findings published by the Financial Times are based on information provided by the Office for National Statistics.

Hampered by its heavy reliance on a now-crippled financial sector, Britain has just recorded six consecutive quarters of contraction, a slump costing six per cent of the nation's economic output.

At the worst point of the recession in the first three months of this year, output fell 2.5 per cent - the fastest rate in more than 50 years.

And while markets expect a return to growth in the current quarter, there are fears of a 'double-dip' next year amid looming tax rises and spending cuts.

The weak economic picture was mirrored in the wider stock market as the FT said the decade delivered annual returns of minus 1.8 per cent on average.

Investors had not lost money over a decade since the Great Depression of the 1930s.

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