Of course it bleedin’ wasn’t.
It was the result of far too much blind optimism by financial institutions that should have known much better, as this Flip Chart Fairy Tales article shows.
If you want the full details, read that article, but to whet your appetite, here are a few snippets.
For a start, the Organisation of Economic Co-operation and Development (OECD) was useless. In June 2007 it suggested that, if there was a downturn, the UK’s deficit might rise above three per cent of GDP; two years later it was at 11 per cent.
The OECD’s idea of the UK’s structural deficit in 2007 was around 2.5 per cent, but it now says the actual level was five per cent, and it didn’t realise. Nice!
Almost all our financial institutions, as the following graph shows, believed the economy would grow (by up to five per cent!) in 2008 and 2009. Outturn: Minus six per cent.
In May 2008 the Bank of England said it expected conditions to improve gradually.
The International Monetary Fund had already said, in April that year, that growth in the UK would slow to 1.6 per cent in 2008, with a moderate recovery (!) in 2009.
And what was Labour’s perspective? At the end of August 2008, Alistair Darling told The Guardian we were facing economic times that were “arguably the worst they’ve been in 60 years. And I think it’s going to be more profound and long-lasting than people thought.”
Most people didn’t believe him.
So – all Labour’s fault? It seems Labour’s Chancellor was the only one who saw it coming! For many, that won’t absolve Labour of the imagined crime; they’ll say Darling – and Brown before him – should have tightened up regulations to head off the crash and protect the UK from what happened in the rest of the world.
But with everybody else and their mother arguing that there was no need, clearly they should take some of the blame as well.
That’s all this blog is saying.
Follow me on Twitter: @MidWalesMike
Join the Vox Political Facebook page.
Buy Vox Political books so we can continue
bringing you the best of the blogs!
Health Warning: Government! is now available
in either print or eBook format here:
The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here: