With over 85 per cent of Northern Rock assets back in private hands, has Britain now recovered from the financial crisis?
James Butterfill, head of research & investment strategy at ETF Securities, says Yes.
One key measure to ascertain if this is true is to look at the growth in household take home pay after inflation. After the initial crisis in 2009, take home pay fell and its growth stayed negative for most industry and government sectors until mid-2014.
We are now seeing positive growth, including in the public sector, according to Vocalink data. Falling commodity prices are partly responsible for this. In essence, this means that the majority of individuals will now feel they have more money in their wallet and are consequently more likely to spend, thus stimulating the economy.
Furthermore, unemployment is back to pre-crisis levels and well below the long-term average, suggesting wages are likely to continue to rise as firms struggle to find suitable staff.
While not entirely related to the credit crisis, government debt to GDP remains elevated, however, suggesting that, until this is reduced, it will continue to be a drag on economic growth – and have a notable effect on savers.
Chris Bailey, European strategist at Raymond James, says No.
Pedants might observe that the UK economy has exceeded peak employment and output levels achieved prior to the global financial crisis. But ask the average UK worker, and they may well have a different view.
Average real wages have been positive in only one year in the past seven, and while ultra-low interest rates have made mortgages more affordable, it has come at the cost of an ever-more warped housing market, with prices spiralling to bigger multiples of household income.
That there is currently an active debate about whether interest rates of just half a percent should be raised or not reflects the sluggish reality of the recovery.
Back in late 2007, a pound bought you two US dollars. And today? Just over one and a half.
Meanwhile, politically, the proportional polling increases for parties outside the ruling norms of the last generation shows building frustration. But there is at least one redeeming factor: on average, continental Europe has it even worse.