by Gary Yates

Created on: February 03, 2009

The UK is currently suffering a crisis within its economy with the UK government announcing on January 23rd 2009 that the country is in recession. This follows other countries who have announced recessions recently including France, Germany, Japan, America and China.

The credit crunch has led to many industries in the UK cutting back services, employment and even pay.

The UK is currently having its worst economic growth for nearly 30 years, which started with the banks and grew into the credit crisis then the recession.

Banks have been unwilling or unable to lend money to each other after a series of investments that went bad. These include the sub-prime loans to people who had less than good credit ratings. The banking industry having such a lack in confidence has effected the stock markets all over the world and has had a snowball effect on growth in the UK economy.

The last two quarterly sets of results for UK growth in the economy presented by the UK government showed, that during the last three months of 2008 the UK had a negative growth of 1.5% GDP (Growth Domestic Product). Also in the three months prior to that growth had declined by 0.6% GDP.

The ramifications from all the doom and gloom in the UK for industry and its citizens are far reaching. Many companies are having a torrid time making money through selling there products.This also has seen manufacturing output decline as companies just cannot afford to operate in the current financial climate.

One main cause that has been within the process of the UK has going into recession, has been because the manufacturing industry has seen a massive downturn in investment and as stated earlier, sales declined during 2008. This has led to large companies closing there doors too trading. Along with that companies have been terminating the employment of there staff. Two high profile closures have been retail chain 'Woolworths' and furniture manufacturers M.F.I. Woolworths although will now relaunch as an online store, they have still closed hundreds of high street stores which had thousands of employees working in them.

People in the UK are now staring at job losses, pay cuts and the possibility of home repossession (foreclosures in the USA) just to name a few problems that are being caused by the UK economy. This is all made worse by the very fact that the cost of living is getting much higher in the UK. Household utility bills such as water, gas and electric have all seen very sharp increases over recent months

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