The impact of the financial crisis on supply

Quarterly Bulletin 2010 Q2
Published on 14 June 2010

By Andrew Benito, Katharine Neiss, Simon Price and Lukasz Rachel of the Bank's Structural Economic Analysis Division.

Output fell sharply in the United Kingdom during the recent global financial crisis, some of which is likely to have reflected a contraction in the economy's supply capacity. This article considers the impact of financial crises on supply and the potential channels through which supply may have been affected during the recent recession. It is likely that the downturn has resulted in a fall in companies' effective supply capacity although the magnitude of that impairment is difficult to gauge.

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