What happened to the UK economy? 5 charts break down the key election issue
The Conservative Party of the current Prime Minister has been in office since 2010, a period that has included the twin shocks of a pandemic and war in Ukraine.
But the United Kingdom has also been held back by two self-inflicted wounds — deep austerity in the wake of the global financial crisis and the 2016 decision to quit the European Union, which raised new barriers to trade. Economic growth has been anemic in recent years, squeezing living standards and starving public services of funds.
The leader of the opposition Labour Party will face off against the Prime Minister in a televised debate. Opinion polls suggest the Conservatives are set to be booted from office, with Labour on course to win a UK election for the first time since Tony Blair took the party to victory in 2005.
The Prime Minister will likely point to falling inflation and a strengthening economy as proof that his plan to ‘restore economic stability’ is working.
But many households are still experiencing a cost-of-living crisis and are struggling to pay their bills. And the state of the overburdened National Health Service comes in a close second among the biggest issues for the electorate, according to polling.
When they cast their ballots, voters will consider whether their lives have materially improved since 2010 when the Conservatives came to power. Here’s what data shows has happened to wages, living standards, the value of the pound, house prices, and waiting times for medical treatment on the NHS.
Inflation has eaten into households’ spending power. Although the annual pace of price rises has slowed — and wages have now grown faster than inflation for nine months in a row — real, or inflation-adjusted, pay has barely increased since 2010, which means people aren’t substantially better-off.
‘Poor income growth has been an unfortunate feature of economic life in the UK over the last 15 years. And it has been slow growth for essentially everyone: rich and poor, old and young,’ an expert said in a statement.
‘In the long run, what is needed is rises in productivity,’ he added.
The think tank has estimated that real average weekly earnings last year were below the level they would have been had they carried on growing at the same pace as before the 2008 financial crisis.
‘Weak productivity growth has delivered an unprecedented stagnation in real wages, even before the highest inflation in four decades hit,’ it said in a report published in December.
Feeble growth in productivity has hamstrung many advanced economies since at least the global financial crisis.
But the United Kingdom has fared worse than many peers, resulting in a bigger hit to incomes and also hurting living standards.
‘The period between 2010 and 2024 has been economically remarkable,’ an expert said in a statement, citing slow earnings growth and steep public spending cuts, among other things. ‘At the heart of it all was a period of abysmal growth in productivity and, with it, living standards.’
According to data, in the 12 years before 2007, the average income of Britain’s working-age population rose more than 40% — more than three times the growth in the United States and seven times that in Germany.
By contrast, between 2007 and 2019, the typical UK income increased just 6% — half the level of the United States and almost three times less than in Germany.
The UK currency has also taken a beating over the past 14 years — not helped by the Brexit referendum in June 2016 or the fiscal policies unveiled by former Conservative Prime Minister Liz Truss.
Britain’s decision to leave the European Union has haunted the pound and inward investment into the country for almost a decade. A weaker currency exacerbates inflation because it raises the cost of imported goods.
While real wages have hardly grown, house prices have soared, pushing the dream of home ownership out of reach for many Brits.
From a peak in September 2022, the average house price fell last December, according to data. But prices remain high by historic standards, particularly when compared with incomes.
With affordability stretched, home ownership rates have fallen. In 2021, a lower percentage of households in England owned their home, down from 68% in 2008/2009.
Millions of Brits are stuck in more expensive rental properties. On average, households now spend more than a quarter of their after-tax income on rent, up from the previous figure.
One of the promises made to voters by the current Prime Minister early on in his premiership was to cut NHS waiting lists. But the number of patients waiting for non-emergency treatment in England has climbed since he made that pledge.
The treatment spans various procedures, as well as non-urgent cardiac surgery, cancer treatment, and neurosurgery. Since some patients require multiple treatments, the number of outstanding appointments stood at a certain number in March, according to NHS England.
NHS waiting lists have grown steadily since the onset of the Covid-19 pandemic, contributing to worker shortages in the UK. According to data, ill health was the reason why more than a significant number of people were ’economically inactive’. An ONS survey found that a third of the economically inactive were waiting for NHS treatment.