Key Issues Affecting UK economy What are the key issues affecting the UK economy over the next few years? Recession and Recovery The biggest problem facing the UK economy is the lack of economic recovery. After a fall in GDP of 6% in 2008/09, the economy briefly recovered, but the recent double dip recession of 2012 has left the UK in a longer economic downturn than the Great Depression. A key factor over the next few years  is whether the UK economy can return to a normal rate of economic growth  or whether we may become stuck in a Japanese style period of economic stagnation. If the UK economy can return to its long run trend rate of economic growth (2.5% and over), we can expect to see a fall in demand deficient unemployment and start to reduce the growing numbers of the long-term unemployed. A return to economic growth would improve government tax revenues and help reduce the budget deficit and stabilise the countries long-term debt. Economic growth would also give firms and consumers the opportunity to reduce their debt overhang from the previous credit crunch. If the UK economy fails to recover, we will see a continued fall in living standards, persistently high unemployment and it will prove very difficult to reduce the government's debt to GDP ratio. Economic growth is a key factor in determining other problems such as unemployment, debt and the banking sector. Issues affecting economic growth Will the Eurozone crisis deepen, leading to a