Friday, October 24, 2008

The Brits Join the Recession Club

We aren't the only ones having a go at a recession. Europe has always seen the UK economy as something to envy but appears that may not be the case too much longer. You need to remember that about 30-35% of the British economy is directly related to banking/finance so all the problems in that sector are telling their tale. On top of that and as unbelievable as it sounds the Brits have racked up even more personal debt than we Yanks have. (I was shocked when I read that.) The combination of the two spells serious trouble down the road. This news is part of the reason the European markets are tanking today in the early trading.
The British economy shrank more than expected and for the first time in 16 years in the third quarter of 2008, as fears grow the country could be in for a painful and prolonged recession.

The Office for National Statistics said on Friday gross domestic product fell 0.5 percent in the three months to September, the biggest drop since Q4 1990 and the first contraction since Q2 1992.

Analysts had forecast a fall of 0.2 percent.

On the year, GDP was 0.3 percent higher, the weakest rate of growth since Q2 1992.

h/t Americablog

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