08 Jan Charts Of The Decade (UK Style)
Since the end of last year, I’ve seen a lot of ‘Charts of the Decade’ posts doing the rounds on the internet. However, they’ve all been very US-centric, so I thought I’d add a UK perspective to the mix.
Like much of the rest of the world, the UK started the decade emerging from the aftermath of the Great Financial Crisis of 2007-2009. January 2010 saw the country blanketed in snow as it experienced its worst winter since 1981-2. On the bright side, unemployment fell for the first time in two years, and at the end of January, the Office for National Statistics announced that the UK was no longer in recession, with GDP having risen by a lukewarm, but positive, 0.1%.
So, what did the next ten years bring?
Unemployment continued to fall
The last recorded unemployment figure (August 2019) showed unemployment falling to just 3.8%, on a par with the US (3.7%). It’s probably not unrealistic to expect this figure to fall further once we leave the EU at the end of this month. With that and the transition period ending at the end of this year, many expect that a proportion of EU citizens currently living and working in the UK may decide to leave. There’s not a lot of wriggle room though, is there? If this does happen, it will be interesting to see just who ends up filling the jobs vacated.
Inflation barely registered
The inflation rate almost halved over the decade, from 2.9% to 1.5%.
Total inflation for the decade was also risibly low
There is a whole generation growing up who have never known an inflationary environment. Some argue that this is the ‘new normal’ and who knows? Perhaps they’re right.
World markets experienced stellar returns
Given where we were at the start of the decade, and the low levels of inflation, if you invested in the world’s broad equity markets, you should be pleased with the results. As usual, some were predicting something quite different at the beginning of 2010. And the wildly inaccurate forecasts just kept on coming, right through almost to the end of the decade. (Who believes this stuff? 🙄)
While world equity markets did very well overall, the US experienced the biggest returns.
When you look at charts like that it’s easy to understand why so many US investors don’t invest internationally. I’m not saying it’s right, but it is understandable.
House prices continued to outpace inflation
Given that wages, in real terms, fell over the decade, we may have raised a generation where only a relatively small proportion will ever get on the property ladder before their parents die. Owning my own house was something I just took for granted in my 20s.
I think there’s only one thing to say here. Brexit.
We’re in a hell of a lot of debt
Given the promises that both main parties were making in the run-up to the General Election, and with the winner now having to make good on theirs, I do wonder how we’re going to pay for it all.
Economic growth wouldn’t appear to be the answer to the spending promises
Even the most optimistic economic forecasts are predicting the UK’s GDP will take a hit as a result of Brexit. We’re really going to need that ‘Brexit bonus’ we’ve been promised 😉
I’m not going to be so stupid as to try and make any predictions about what the next decade holds. I don’t think many would have predicted ten years ago that today we’d be on the brink of leaving the EU, yet here we are.
Whatever the next decade has in store for us, let’s at least hope it’s a peaceful one.