Sentance, Andrew, Taylor, Mark P., 1958- and Wieladek, Tomasz. (2012) How the UK economy weathered the financial storm. Journal of International Money and Finance, Vol.31 (No.1). pp. 102-123. ISSN 02615606

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Abstract

Prior to the global financial crisis of 2008, the UK had the largest banking sector asset to GDP ratio among large countries, and had experienced rapid real property price increases as well as a persistent current account deficit in the preceding decade. These factors, together with its role as an international financial centre, made the UK economy particularly vulnerable to the onset of the global financial crisis. Although the initial drop in real GDP was steep, we provide evidence that the economy has weathered the financial storm better than many feared, and has fared no worse than its peer group of major economies. In this paper we assess the reasons underlying this outcome, including the possibility of exaggerated vulnerabilities, global economic recovery, the flexible supply side of the UK economy, as well as fiscal, financial and monetary policy interventions. Our analysis suggests that all of these factors played a role in cushioning the impact on the UK real economy, leading to a more benign outcome than most observers expected.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HG Finance
Divisions:	Faculty of Social Sciences > Centre for the Study of Globalisation and Regionalisation Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH):	International finance, Financial crises, Money, Great Britain -- Economic conditions
Journal or Publication Title:	Journal of International Money and Finance
Publisher:	Elsevier BV
ISSN:	02615606
Date:	February 2012
Volume:	Vol.31
Number:	No.1
Page Range:	pp. 102-123
Identification Number:	10.1016/j.jimonfin.2011.11.007
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
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URI:	http://wrap.warwick.ac.uk/id/eprint/41100

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