Stephen Boyle, head of economics at the Royal Bank of Scotland, said the last four years have been the weakest performance for Britain since records started being collected in the pre-Victorian era – outside a post-war period.
He said the last time the economy was so bad was immediately after World War One and World War Two, when the economy was crippled by years of fighting.
“Those aside, 2008-12 fall was bigger than any since before Victoria ascended the throne,” he said.
“It’s the worst economic performance since at least 1830, outside of post-war demobilisations,” he told The Daily Telegraph. “It’s worse than the 1920s, it’s worse than the Great Depression.”
However, the top economist said the Chancellor has “limited options” to steer the UK to recovery when most of the world is struggling with financial difficulties.
Official figures showed the UK economy retreated by 0.3 per cent in the last three months of 2012 as Britain’s manufacturers suffered their worst year since the financial crash.
Tony Dolphin, chief economist at the IPPR, said there would not necessarily be a triple-dip recession but the economy remains in a weak position.
“We will not know for sure whether the economy is back in recession for another three months,” he said. “What we do know, however, is that the economy is facing a triple crisis: stagnation, debt and imbalance.”
Over the last few days, businesses have warned that efforts to return the economy to growth are being held back by David Cameron’s offer of an EU referendum and tough stance on corporate tax avoidance.
Lloyd Blankfein, the chief executive of Goldman Sachs, the investment bank, yesterday criticised this crackdown on people who legally paying more tax than they have to.
He said censuring people for their tax arrangements risked “criminalising every right-thinking person who organises his or her affairs in a sensible way”.
Experts from Barclays also added to worries that the Prime Minister has caused uncertainty over Britain’s membership of the EU, saying it will be “harder to attract inward investment”
“It may even prompt U.K. firms to expand operations in other EU countries rather than domestically,” Barclays Research said in a briefing note. “If the government were able to persuade companies that the U.K.’s future lies within the EU, and on more favorable terms, the harm might be kept to a minimum.”