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■ Chris V. Thangham
Sad to hear the economy in Britain is getting worse. I thought US was alone in this. Is this because of high gas prices?
Its been getting worse here in the UK for ages now. I think that most of the worlds economies are suffering as well as the UK but because the US is such a huge economy on its own, then what happens in the US has a massive effect on what happens elsewhere.
Obviously we all saw the effects of the collapse of the sub-prime mortgage market in the US which had a follow on effect for one of the UK's largest lenders the Northern Rock which had to be rescued by the government. So this started tremors in the financial markets, an increase in mortgage rates by the rest of the UK banks. This lead to a massive problem in our housing market as buyers and sellers evaporated. 1000's of jobs were then lost in the housing sector as builders didnt have any homes to build etc..
We've also seen a huge hike in food prices, fuelled by the cost of oil (it was after all over $144 a barrel a couple of months back), petrol and diesel. If oil goes up, it then costs the farmers more to tend the fields and so on, move the food around the country etc.. Despite oil dropping back, we havent seen this filter through to the price of petrol at the pump, not by much anyway, so once again prices remain high. I also think that the poor summer we had last year contributed to the high price of food that we have seen. And this summer, whilst not as bad with floods as last year, hasnt really been much better.
In summary, its really bad for the UK at the moment and recent figures say that in the last 3 months the economy didnt grow whatsoever and predictions are that we could be only 6 months away from a full blown recession ...
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