Friday, May 2, 2008
Well written article that sums up the present postion
What does the economic turmoil mean for the UK economy? How well can an economy long characterised by soaring house prices, exploding debt and a dynamic financial sector adjust to a new world? The UK is a country in which financial intermediation grew by 126 per cent, in real terms, between 1992 and 2007. If the growth of debt is now to slow, as it must, this explosion of the financial services industry cannot continue. The challenges ahead, therefore, are far more structural than merely cyclical. A new economy will emerge. The transition will be more painful than the government cares to admit. It is unavoidable, all the same.