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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

25 Jun 2009

Bank of England expresses concern

Bank of England Governor Mervyn King states that the UK economy is 'more uncertain then ever'
describing the level of Government debt as 'extraordinary'. According to leading economists the UK will sink into more debt than any other developed country in the world next year.
If this were coupled with an upturn in the economy in general then you could offset the cost against tangible results, however although some industries are reporting stability, there are likely to be significant job losses yet to come in many sectors.
Any hopes that the government had of significant progress before the next election were never really realistic, but look even less likely as each day passes. Right now, Gordon Brown's personal political capital is vastly diminished even the most unbiased political observer must concede that the current administration are in considerable trouble. I would not make so bold as to say that ANYONE could have steered us around the obstacle of global recession, but I maintain that the massive commitment that we have made in order to try and stave off the worst effects of the crisis has always been likely to lead to throwing good money after bad - a precise definition of 'gambling' if ever I heard of one. The trouble is that gambling very often ends up in financial ruin - one thing to subject yourself to that type of fate, entirely another when you do it with a national economy.
Nobody knows what the worst possible scenario might be, but I have a sneaking feeling that we might yet find out. Even a change of government at this stage guarantees NOTHING, much of the damage has surely already been done. It is likely that even the Governor of the Bank of England is not above trying to make some political capital out of the situation, and his comments may well be timed to tip the balance of doubt over New Labour and Gordon Brown specifically. The fact remains however that whatever happens, this administration will be leaving a heck of a legacy in terms of unprecedented national debt which no pretender to the throne should disregard. It is not enough for opposition leaders to shout about recent failings, we need to hear something positive about where a new leadership (from ANY party) will take us which will help us out of this mess.

Related posts:
Is this the new Great Depression?
How to survive recession
Government Intervention
The unsinkable Gordon Brown

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