The performance of the UK economy has been poor since the financial crisis that began in 2007. At the end of 2013, UK GDP was still almost 2 per cent lower than it had been at its most recent peak in the beginning of 2008 and GDP per capita was over 6 per cent lower than it had been six years earlier. These outturns were much weaker than could reasonably have been expected taking account of the normal pace of economic growth. At the time of the 2007 Pre-Budget Report, the UK government based its projections for the public finances on the ‘cautious’ assumption of average annual growth of 2½ per cent. The expected level of GDP at the end of 2013 was around 18 per cent higher than was actually achieved. Moreover, employment has actually increased by over 600,000 since the end of 2007, so that it has taken more workers to produce less output.