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British banking industry drags down UK economy
Business digest: Banks responsible for a third of economic recession despite much smaller output contribution
The British banking industry is responsible for at least 35 per cent of the national economic decline despite accounting for just 5.1 per cent of the country's output, according to figures from the Office for National Statistics.
The UK economy has contracted by 2.8 per cent since September 2008, when the financial crisis began to unfold. One percentage point is due to the shrinking bank industry, which fell seven per cent in 2009, 5.1 per cent in 2010, and 2.6 per cent so far this year.
There have been job cuts across the nation's banking sector, with Lloyds Banking Group shedding 15,000, Barclays losing 3,000 and HSBC axing 25,000 worldwide. Nonetheless, roughly £6.7bn of bonuses were paid in the city in the 2010-11 financial year.
The Chancellor of the Exchequer, George Osborne, said: "While our economy as a whole has grown by 2.5pc, the financial sector has shrunk by 4pc. Take the financial sector out of the equation, and economic growth in the rest of the economy during the recovery has actually been above its average rate of the last two decades."
Read a full report at the Daily Telegraph. ·
