It is confirmed, the UK economy is sinking deeper into the doldrums and is officially in recession for the first time in nearly 20 years.
The latest government figures show that at the end of last year GDP shrank at its fastest pace since 1980; it was down 1.5 percent. What started as a financial crisis with banking sector turmoil has spread to the high street rippling out through the retail world and services sector bringing massive job losses and leaving many Britons bewildered. As one man in a street surrounded by shuttered retailers said: “People come down here and see the shops closed and they think: ‘what’s happening?’ all the time, what can you do?” One business that is booming is pawnbrokers. Rejected by the banks for loans more people are borrowing against the value of their valuables. The UK government’s bank bailouts and other measures are supposed to thaw the credit freeze. UK Prime Minister Gordon Brown said: “We are fighting this global recession with every weapon at our disposal. And I think people will know that in addition to interest rate cuts, VAT cuts, what we’ve done for pensions and for child benefits, which have been raised, and also what we’re doing for public works (infrastructure renewal). We’re doing everything we can to take us through what is a global banking crisis.” Coping with the stresses of the recession is going to preoccupy many Britons particularly business leaders this year and a new survey in the UK says people consider physical as well as well as mental strength to be essential. With the economy predicted to be stuck in the mud for months to come, the recession workout has only just begun.