The Bank’s view was that each of these dynamics would likely play out in turn, resulting in a two-phased recovery: first reopening and then recuperation. Why did we expect full recuperation to take longer? It was partly because of our experience with the global financial crisis of 2008–09.
The long, drawn-out recovery that followed that crisis reflected a large and prolonged rise in unemployment and massive damage to balance sheets. As a result, the global economy took 10 years to recover to its pre-crisis trend. 7  Labour markets can be damaged by lengthy recessions. Unemployment can have persistent effects on people’s skills and their ability to re-enter the workforce.