The scars of the 2008 financial crisis haven’t even healed yet, and the United Kingdom’s economy is now facing up to one of the G-7’s largest pandemic-induced economic slumps. The decline comes alongside a potentially disruptive decoupling with its biggest trading partner, the European Union, when the Brexit transition period ends on Dec. 31. For some critics, the turmoil is just another chapter in the long saga of Britain’s demise on the global economic stage. But decline is not inevitable. For a country well accustomed to short-term crisis management, the United Kingdom will need to rediscover the sense of the long term if it seeks to refresh its position as an economic powerhouse.
The United Kingdom’s finance-driven economy never truly bounced back after the global credit crisis. Productivity growth—which is vital for long-term improvements in living standards—has been largely stagnant. Post-industrial northern regions continue to lag behind southern urban centers. Since 2008, growth in wages and business investment has also been among the weakest across developed nations. Meanwhile, years of political tumult over how to leave the EU have diverted attention from the country’s underlying economic maladies. Indeed, the past decade has seen it lose its coveted place as one of the world’s five largest economies to India, and it is projected to drop out the top 10 by 2030.
