Several weeks ago a leading forecaster from the City predicted that there was still a very real possibility that Britain could go bust.

It was recently revealed that the nation was just hours away from going bust in October last year, when major investors tried to take their money out of British banks as a result of the turmoil and turbulence within the banking industry. Frantic behind the scenes work by government officials helped to avoid the situation but the forecaster said that this did not mean that it would not happen in the future.

The report was leaked from Numis Securities, and also claimed that the recession was going to be a very long and deep one, and that house prices could end up falling by up to 55 percent in total.

Chancellor of the Exchequer, Alistair Darling, recently said in a speech: ‘It is crucial to remember that we are dealing with a constantly evolving problem – making life difficult for every country. ‘Since November we have witnessed a collapse in world trade not seen in generations and a much deeper and more widespread global recession, with every country affected.’

He also said: ‘When it comes to economic forecasts, even the International Monetary Fund finds it difficult to hit this moving target.’

However, the report states: ‘The bankruptcy of the UK is a very real probability as the UK government is trying to stimulate a greater debt burden in a grossly over-indebted economy. We believe the scale of the imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.’

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