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.’

Britain could still go bankrupt is a post from: Nicon Debt Management

Related posts:

1. Labour accused of being complacent over debt
2. Increasing credit card defaults making recession worse

Some time ago Darling had indicated that he thought the recession could be over by as early as the middle of this year, but his prediction has now changed, and he had admitted that the downturn is worse than he had anticipated.

The Prime Minister, Gordon Brown, also said that he had failed to see the financial and economic disaster coming, and said that there was little alternative other than to use taxpayer’s money to try and bail out the financial systems in the UK. However, Tory Party leader, David Cameron, said that Labour had now lost the confidence of the public and industry, and that this was vital in order to assist the recovery of the nation.

Cameron stated: ‘It is confidence that will be key to the recovery. We also have to get the Government finances under control, a proper plan for regulating the banks to make sure we have sensible policies so we get confidence back.’ Nick Clegg from the Liberal Democrats said: ‘My worry is we might be teetering between recession and slump if you get these major question marks raised about our currency and the viability of UK plc, the sustainability of our finances.’

When asked what his biggest mistake had been by the BBC the Prime Minister said: ‘We believed there was a possibility of institutional failure in the banking and financial system so we did all sorts of simulation exercises. But what we didn’t see – and nobody saw – was the possibility of complete market failure, that markets seized up across the world.’

Chancellor admits recession could last two years is a post from: Nicon Debt Management

Related posts:

1. Britain could still go bankrupt
2. Is the UK on the brink of recession?
3. Increasing credit card defaults making recession worse