With the onset of the Global Financial Crisis in the late Summer of 2007, the United Kingdom was one of the first countries to experience financial panic after the United States. In September 2007, the bank Northern Rock became the UK's first bank to collapse in 150 years due to a bank run, as depositors reacted to the announcement that the bank would be seeking emergency liquidity support from the Bank of England by lining up outside their bank branches to withdraw money. The failure of Northern Rock was a bad omen for the UK economy and financial sector, as banks stopped lending to each other and to customers in what became known as the 'credit crunch'. Government bailouts, private bailouts By October 2008, many UK banks were facing a situation where if they did not receive external assistance, then they would have to default on their debts and likely have to declare bankruptcy. The UK's Labour government, led by Prime Minister Gordon Brown, announced that it would provide emergency funds to stabilize the banking system, leading to the part or full nationalization of some of Britain's largest financial firms. Specifically, Royal Bank of Scotland, Lloyds TSB, and HBOS received over 35 billion pounds in a government cash injection, while Barclays opted to seek investment from private investors in order to avoid nationalization, much of which came from the state of Qatar. The bailouts caused UK government debt ratios to almost double over the period of the crisis, while public trust in the financial system sank.

The classification of finiancial crisis interventions

Source agency: Office for National Statistics

Designation: Supporting material

Language: English

Alternative title: Financial Crisis and Statitical Classification

Data underlying the report of a study that assesses and quantifes the impacts of the financial crisis and subsequent global economic recession on the growth and performance of UK SME employers. Analyses existing data from two previous survey sources on SME employers in the pre-recession and recessionary periods. Covers how the problems in the banking sector have affected the supply of finance to the SME sector, and whether this has depressed business performance and investment. Looks at the impact of the recession has been more serious for particular types of entrepreneurs and businesses.

The gross domestic product of the United Kingdom was around 2.56 trillion British pounds, an increase when compared to the previous year, when UK GDP amounted to about 2.54 trillion pounds. The significant drop in GDP visible in 2020 was due to the COVID-19 pandemic, with the smaller declines in 2008 and 2009 because of the global financial crisis of the late 2000s. Low growth problem in the UK Despite growing by 0.9 percent in 2024, and 0.4 percent in 2023 the UK economy is not that much larger than it was before the COVID-19 pandemic. Since recovering from a huge fall in GDP in the second quarter of 2020, the UK economy has alternated between periods of contraction and low growth, with the UK even in a recession at the end of 2023. While economic growth picked up somewhat in 2024, GDP per capita is lower than it was in 2022, following two years of negative growth. How big is the UK economy in relation to the rest of the world? As of 2024, the UK had the sixth-largest economy in the world, behind the United States, China, Japan, Germany, and India. Among European nations, this meant that the UK currently has the second-largest economy in Europe, although the economy of France, Europe's third-largest economy, is of a similar size. The UK's global economic ranking will likely fall in the coming years, however, with the UK's share of global GDP expected to fall from 2.16 percent in 2025 to 2.02 percent by 2029.  

This survey shows the general opinion on the behaviour of the UK banks in the United Kingdom (UK) in March 2013. Of the respondents, 21 percent believe the following statement "UK banks are learning from their mistakes; their behaviour is improving" to be true.

The UK economy shrank by 0.1 percent in January 2025 after growing by 0.4 percent in December. Since a huge decline in GDP in April 2020, the UK economy has gradually recovered and is now around 3.4 percent larger than it was before the COVID-19 pandemic. After the initial recovery from the pandemic, however, the UK economy has effectively flatlined, fluctuating between low growth and small contractions since January 2022. Labour banking on growth to turn around fortunes in 2025 In February 2025, just over half a year after winning the last general election, the approval rating for the new Labour government fell to a low of -48 percent. Furthermore, the Prime Minister, Keir Starmer was not only less popular than the new Conservative leader, Kemi Badenoch, but also the leader of the Reform Party, Nigel Farage, whose party have surged in opinion polls recently. This remarkable decline in popularity for the new government is, in some part, due to a deliberate policy of making tough decisions early. Arguably, the most damaging of these policies was the withdrawal of the winter fuel allowance for some pensioners, although other factors such as a controversy about gifts and donations also hurt the government. While Labour aims to restore the UK's economic and political credibility in the long term, they will certainly hope for some good economic news sooner rather than later. Economy bounces back in 2024 after ending 2023 in recession Due to two consecutive quarters of negative economic growth, in late 2023 the UK economy ended the year in recession. After not growing at all in the second quarter of 2023, UK GDP fell by 0.1 percent in the third quarter, and then by 0.3 percent in the last quarter. For the whole of 2023, the economy grew by 0.4 percent compared to 2022, and for 2024 is forecast to have grown by 1.1 percent. During the first two quarters of 2024, UK GDP grew by 0.7 percent, and 0.4 percent, with this relatively strong growth followed by zero percent growth in the third quarter of the year. Although the economy had started to grow again by the time of the 2024 general election, this was not enough to save the Conservative government at the time. Despite usually seen as the best party for handling the economy, the Conservative's economic competency was behind that of Labour on the eve of the 2024 election.

This statistic shows the United Kingdom (UK) financial and insurance industries gross value added (GVA) as a share of the UK's total economic output. It can be seen that in the years running up to the global financial crisis the United Kingdoms finance and insurance industry became a major factor of its economic gross value added output. in 2009 (one year post financial crisis) the UK's finance and insurance industry accounted for nine percent of its GVA. Since then there has been a steady decrease amounting to 6.9 percent as of 2018. In 2017, London accounted for almost half of financial sectors GVA.

Gigaclear, a UK broadband company, faces financial turmoil impacting railway pensions and taxpayers due to funding issues with investor Equitix.

In the short term, the impact of COVID-19 on consumer financial services will be analogous to the global financial crisis of 2008-09, creating a period of economic paralysis and leaving a massive hole in banks’ balance sheets. Read More

The mortgage market has recovered well since the financial crisis, often producing double-digit growth each year. However, rising economic uncertainties will dampen the prospects for future growth over the coming years. During the forecast period (2018-22), gross advances are expected to record a compound annual growth rate (CAGR) of 4.2%, reaching £338bn by the end of the forecast period versus a historic five-year CAGR of 7.6% from 2013 to 2017. Read More

One of the major duties the Bank of England (BoE) is tasked with is keeping inflation rates low and stable. The usual tactic for keeping inflation rates down, and therefore the price of goods and services stable by the Bank of England is through lowering the Bank Rate. Such a measure was used in 2008 during the global recession when the BoE lowered the bank base rate from 5 percent to 0.5 percent. Due to the economic fears surrounding the COVID-19 virus, as of the 19th of March 2020, the bank base rate was set to its lowest ever standing. The issue with lowering interest rates is that there is an end limit as to how low they can go.

Quantitative easing

Quantitative easing is a measure that central banks can use to inject money into the economy to hopefully boost spending and investment. Quantitative easing is the creation of digital money in order to purchase government bonds. By purchasing large amounts of government bonds, the interest rates on those bonds lower. This in turn means that the interest rates offered on loans for the purchasing of mortgages or business loans also lowers, encouraging spending and stimulating the economy.

Large enterprises jump at the opportunity

After the initial stimulus of 200 billion British pounds through quantitative easing in March 2020, the Bank of England announced in June that they would increase the amount by a further one hundred billion British pounds. In March of 2020, the headline flow of borrowing by non-financial industries including construction, transport, real estate and the manufacturing sectors increased significantly.

While the market has recovered well since the financial crisis, often growing by a double-digit percentage year-on-year, rising economic uncertainties will dampen the prospects for future growth over the coming years. During 2017-21, gross advances are expected to record a CAGR of 5.7%, reaching £327.0bn by the end of the forecast period. Read More

In May 2022, 49 percent of people in the United Kingdom advised that they were highly dissatisfied with the government's response to the cost of living crisis. High inflation has caused an economic crisis in the UK, with 87 percent of people reporting an increase in their cost of living as of March 2022.

COVID-19 is an economic shock analogous to the global financial crisis. Now, as then, there will be short-term changes as life, industry, and people adjust, but also more long-term structural changes that will live on long after COVID-19 has passed. This presents opportunities for decisive banks to right-size branch networks, optimize the digital experience, and establish sustainability credentials, thus emerging in a stronger position. But many banks will have been blindsided by this issue, which is evolving in fast and unpredictable ways. As in 2008, banks risk being immobilized by uncertainty, or getting caught in constant firefights that prevent a more considered, strategic response. And the costs of any missteps will be much higher than in 2008, as a variety of banking alternatives – including new digital banks, telcos, and tech companies – are poised and ready to grab market share. Read More

The unemployment rate of the United Kingdom was 4.4 percent in January 2025, unchanged from the previous month. Before the arrival of the COVID-19 pandemic, the UK had relatively low levels of unemployment, comparable with the mid-1970s. Between January 2000 and the most recent month, unemployment was highest in November 2011 when the unemployment rate hit 8.5 percent. Will unemployment continue to rise in 2025? Although low by historic standards, there has been a noticeable uptick in the UK's unemployment rate, with other labor market indicators also pointing to further loosening. In December 2024, the number of job vacancies in the UK, fell to its lowest level since May 2021, while payrolled employment declined by 47,000 compared with November. Whether this is a continuation of a broader cooling of the labor market since 2022, or a reaction to more recent economic developments, such as upcoming tax rises for employers, remains to be seen. Forecasts made in late 2024 suggest that the unemployment rate will remain relatively stable in 2025, averaging out at 4.1 percent, and falling again to four percent in 2026.
Demographics of the unemployed As of the third quarter of 2024, the unemployment rate for men was slightly higher than that of women, at 4.4 percent, compared to 4.1 percent. During the financial crisis at the end of the 2000s, the unemployment rate for women peaked at a quarterly rate of 7.7 percent, whereas for men, the rate was 9.1 percent. Unemployment is also heavily associated with age, and young people in general are far more vulnerable to unemployment than older age groups. In late 2011, for example, the unemployment rate for those aged between 16 and 24 reached 22.3 percent, compared with 8.2 percent for people aged 25 to 34, while older age groups had even lower peaks during this time.

In 2024, gross domestic product per capita in the United Kingdom was 36,977 British pounds, compared with 37,028 pounds in the previous year. This was the second-consecutive year that GDP per head has fallen in the UK, with the measure shrinking by 0.9 percent in 2023. In general, while GDP per capita has grown quite consistently throughout this period, there are noticeable declines, especially between 2007 and 2009, and between 2019 and 2020, due to the Global Financial Crisis, and COVID-19 pandemic, respectively. Why is GDP per capita falling when the economy is growing? During the last two years that GDP per capita fell in the UK, the overall economy grew by 0.4 percent in 2023 and 0.9 percent in 2024. While the overall UK economy is therefore larger than it was in 2022, the UK's population has grown at a faster rate, resulting in the lower GDP per capita figure. The long-term slump in the UK's productivity, as measured by output per hour worked, has meant that the gap between GDP growth and GDP per capita growth has been widening for some time. Economy remains the main concern of UK voters As of February 2025, the economy was seen as the main issue facing the UK, just ahead of immigration, health, and several other problems in the country. While Brexit was seen as the most important issue before COVID-19, and concerns about health were dominant throughout 2020 and 2021, the economy has generally been the primary facing voters issue since 2022. The surge in inflation throughout 2022 and 2023, and the impact this had on wages and living standards, resulted in a very tough period for UK households. As of January 2025, 57 percent of households were still noticing rising living costs, although this is down from a peak of 91 percent in August 2022.

Shell had the highest annual revenue of all companies based in the United Kingdom in 2024, at approximately 289.7 billion U.S. dollars. BP had the second-highest annual revenue at 202.8 billion dollars, followed by HSBC Holdings, which had a revenue of 144.9 billion U.S. dollars. In terms of global employee numbers, however, Compass Group had the highest number among UK-based businesses, at approximately half a million in 2024, followed by Tesco at 345,000 and HSBC at almost 214,000. Big Oil, a banking giant, and Britain's top supermarket chain The two companies listed as having the most revenue in the UK this year also two of the biggest oil and gas companies in the world, alongside Chevron, Eni, ExxonMobil, and TotalEnergies. After a huge surge in energy prices in 2022, these companies saw their profits recede slightly in 2023, but clearly remain in strong financial positions. HSBC Holdings, meanwhile, was the largest bank in Europe in terms of market capitalization, and was estimated to have the third-highest number of UK-based customers in 2023. The company with the fourth-highest revenue in this year, Tesco has by some distance the largest grocery-market share in Great Britain, a position it has maintained despite growing competition from discounters like Lidl and Aldi. UK economy health check In the first two quarters of 2024, the UK economy grew by 0.7 percent, and 0.6 percent, emerging from a brief recession at the end of 2023. Consumer Price inflation, which reached a peak of 11.1 percent in October 2022, fell below two percent in September 2024, for the first time since April 2021, potentially leading to further interest rate cuts. Despite these generally positive signs, business confidence in the UK in September 2024 was lower than at any point since early 2021. Company insolvencies in England and Wales have also reached levels not seen since the global financial crisis in the late 2000s. This generally mixed picture will be influenced by the next government budget set for the end of October 2024, which may see certain taxes increase due to the UK's tricky fiscal situation.

Employment in the financial services sector in the United Kingdom fell between 2001 and 2021. The total number of people employed in this sector amounted to approximately 1.1 million in 2021, a figure that is unchanged since 2009. This was a decrease compared to pre-global recession figures, when on the British market there were 1.2 million people employed in all subsectors of financial services. These figures have decreased as a result of the crisis and closure of bank branches across the country.

The closing of bank branches

The increasing usage of online banking has resulted in a large number of bank branch closures in the United Kingdom. Many banks have seen dramatic declines in their number of branches in the last few years. The branch closures have become a way for the banks of decreasing expenditure as profit margins become tighter.

Financial service sector

Financial services, which include banks, credit unions, credit-card companies, accountancy firms, insurance companies as well as financial service companies are an integral part of any economy. The banking sector assets as percentage of gross domestic product (GDP) was approximately 378 percent in 2019.

As of January 29, 2025, the FTSE index stood at 8,557.81 points - well above its average value of around 7,500 points in the past few years.On the 12th of March 2020, amid the escalating crisis surrounding the coronavirus and fears of a global recession, the FTSE 100 suffered the second largest one day crash in its history and the biggest since the 1987 market crash. On the 23rd of March, the FTSE index saw its lowest value this year to date at 4,993.89 but has since began a tentative recovery. With the continuation of the pandemic, the FTSE 100 index was making a tentative recovery between late March 2020 and early June 2020. Since then the FSTE 100 index had plateaued towards the end of July, before starting a tentative upward trend in November. FTSE 100 The Financial Times Stock Exchange 100 Index, otherwise known as the FTSE 100 Index is a share index of the 100 largest companies trading on the London Stock Exchange in terms of market capitalization. At the end of March 2024, the largest company trading on the LSE was Shell. The largest ever initial public offering (IPO) on the LSE was Glencore International plc. European stock exchanges While nearly every country in Europe has a stock exchange, only five are considered major, and have a market capital of over one trillion U.S dollars. European stock exchanges make up two of the top ten major stock markets in the world. Europe’s biggest stock exchange is the Euronext which combines seven markets based in Belgium, France, England, Ireland, the Netherlands, Norway, and Portugal.

Abstract

The Life in Transition Survey, after the crisis (LiTS II), is the second round of LiTS surveys, previously conducted in 2006 (LiTS I). In late 2006, the EBRD and World Bank carried out the first comprehensive survey of individuals and households across virtually the whole transition region. The purpose was to gain a better understanding of how people's lives had been shaped and affected by the upheavals of the previous 15 years.

Four years later, the EBRD and World Bank commissioned a second round of the survey. The circumstances facing most people were significantly different between the first and second rounds. The Life in Transition Survey I (LiTS I) was carried out at a time when the region's economies were, with few exceptions, growing strongly. In contrast, LiTS II took place in late 2010, at a time when most countries were still facing the aftershocks of a severe global economic crisis.

LiTS II advances and improves on LiTS I in two important ways. First, the questionnaire was substantially revised. The new questionnaire includes sections on the impact of the crisis and on climate change issues, as well as improved and expanded questions in areas such as corporate governance, public service delivery, and economic and social attitudes. Second, the coverage has been expanded to include five western European "comparator" countries - France, Germany, Italy, Sweden and the UK. This allows us to benchmark the transition region against some advanced market economies, thereby giving a clearer perspective on the remaining challenges facing transition countries.

Geographic coverage

The second Life in Transition Survey (LiTS II) was implemented in 30 transition countries (Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Former Yugoslav Republic of Macedonia (FYROM), Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Turkey, Ukraine, Uzbekistan and Kosovo) as well as five comparator countries in western Europe (France, Germany, Italy, Sweden and the United Kingdom).

Analysis unit

• individuals
• households

Kind of data

Sample survey data [ssd]

Sampling procedure

The sampling methodology was designed to make the sample nationally representative. In order to achieve this, a two-stage clustered stratified sampling procedure was used to select the households to be included in the sample. In 25 transition countries, France, Germany, Italy and Sweden, the survey was conducted face-to-face in 1,000 randomly chosen households. In Russia, Ukraine, Uzbekistan, Serbia, Poland and the United Kingdom there were 1,500 household interviews in order to allow for a reasonably large sample for a follow-up telephone survey, which will be based on a shortened version of the current questionnaire and which will be conducted one year after the face-to-face survey, i.e., in autumn 2011.

In the first stage of the sampling, sample frame of Primary Sampling Units were established. In all countries, the most recent available sample frame of Primary Sampling Units (PSUs) was selected as the starting point. Local electoral territorial units were used as PSUs wherever it was possible, as they tend to carry the most up-to-date information about household addresses. The following sampling frames were used:

Electoral districts: Bulgaria, Hungary, Poland, Romania, Serbia. Polling station territories: Albania, Armenia, Belarus, Bosnia and Herzegovina, Moldova, Montenegro. Census Enumeration Districts: Slovak Republic, Sweden, Tajikistan, Turkey. Geo-administrative divisions: the remaining countries.

The second stage in sampling consisted of selecting households within each PSU. The aim was to make sure that each household was selected with an equal probability within any given PSU and hence all households in the country had the same probability of being selected. Two sampling procedures were used. In the majority of countries, a random walk fieldwork procedure was used: the fieldwork coordinator selected the first address to be sampled, and the interviewer was given clear instructions on how to select remaining addresses within the PSUs. For a small number of countries - Hungary, Lithuania, Slovenia and Sweden and the United Kingdom - the sample was pre-selected to ensure that the probability of any household's inclusion was always equivalent to the probability generated by random selection.

The sampling procedures are more fully described in "Life in Transition Survey 2010 - Final Report" pp.114-115.

Mode of data collection

Face-to-face [f2f]

Research instrument

The questionnaire of LiST II includes sections on the impact of the crisis and on climate change issues, as well as improved and expanded questions in areas such as corporate governance, public service delivery, and economic and social attitudes.

There are 8 Sections in the questionnaire: Household Roster, Housing and Expenses, Attitudes and Values, Climate Change, Labour, Education and Entrepreneurial Activity, Governance, Miscellaneous Questions, and Impact of the Crisis.

The respondents of the questionnaire are the head of the households or other knowledgeable household members for section 1 and 8. For sections 3-7, the respondents are the people selected randomly by using selection grids.

Response rate

The standard interview method called for each selected household to be visited at least three times before being replaced. In the majority of cases (79 percent), however, the interviews were completed on the first visit. In 61 percent of cases, the head of the household and the principal respondent were the same person; in the remaining 39 percent, two different interviews were required to be carried out in the same household.