UK Economy in Steep Decline

Palace of Westminster in London

As I have repeated reported it is not just the USA that is having economic problems. The German press is also taking note of the United Kingdom:

The Steep Decline of the British Economy

As the global economic crisis takes hold, hardly any other country has seen its fortunes wane as brutally as the United Kingdom. Once a model economy, the country has been overcome by a deep sense of uncertainty.

Spiegel – Feb 23, 2009

It is a gloomy February in Great Britain, yet another month in which the economy is shrinking and the pound is faltering, and yet another month of record growth in unemployment.

It is a month that has seen Ed Balls, the Secretary of State for Children, Schools and Families, refer to the current recession as the “worst in 100 years,” and which has witnessed the heads of the country’s largest banks appear on television to apologize to the nation for the harm they have caused.

Meanwhile, Britons are asking themselves how things could have come to this.

Ash Akhtiar, who works for an employment agency in a Birmingham suburb, says that he wants to see someone pay for all of this. David L., a banker who, fearing for his job does not wish to see his name in print, is considering buying a gun to protect his family.

Philip Augar, a financial expert, tries to explain how his country could have become so dependent on banks and loans, while bestselling author Tony Parsons says that the upheaval the United Kingdom is experiencing is as serious as the fall of the Berlin Wall.

The current mood in Great Britain is gloomy. Long Europe’s most successful economy, Britain’s fortunes have since plunged more than those of almost any other European country.

Unemployment is rising twice as fast as the European average. Two million people have already lost their jobs, a number that could rise to three million by the end of the year. According to the International Monetary Fund (IMF), the British economy will shrink by 2.8 percent in 2009, the greatest projected decline among the seven largest industrialized nations.

Ironically, for a long time it seemed as if Great Britain had done everything right. Didn’t former Prime Ministers Margaret Thatcher and Tony Blair bring deep-seated reforms to the country? The British experienced a 16-year economic boom and it seemed as if they had successfully transitioned into a post-industrial, globalized service economy driven by a rapidly growing financial sector.

And now it is precisely those investment bankers who practiced their modern alchemy in the glass towers of the City of London who have plunged the country and the world into the biggest economic crisis since the 1930s. Great Britain was at the root of this worldwide economic downturn and is now especially hard-hit by it. What began 18 months ago as a financial crisis in London and other cities has now taken hold of the entire country.

It began when the British real estate bubble burst, first for residential and then for commercial property. The investment banking sector fell apart at the same time. The country has been in a deep recession since the fourth quarter of last year. Consumption and industrial production are in serious decline, while the value of the British pound has fallen to that of the euro.

Ash Akhtiar is one of the few people working overtime these days in Washwood Heath, a run-down suburb of Birmingham…

More and more people are losing their jobs, and more and more are coming to see Akhtiar. “You can see the desperation in their eyes,” he says. “They realize that things are different now, and that they won’t get new jobs after only a few weeks.”

Unemployment is rising rapidly — by 20 percent between October and December of last year alone — in the West Midlands region surrounding Birmingham, the home of the British auto industry. Hardly any carmakers with plants in the region — Aston Martin, Jaguar, Land Rover, Honda — are operating at full capacity these days, and hardly any carmaker is still in British hands. Thousands of jobs have been cut, and tens of thousands of workers are working reduced hours or have been furloughed temporarily…

Nothing but Bad News…

But the country’s once-powerful bankers sounded significantly more subdued as they ate humble pie before the Parliament’s Treasury Select Committee in London at the beginning of February. Lord Dennis Stevenson, the former chairman of the HBOS banking and insurance group, told the committee: “Our shareholders, all of us, have lost a great deal of money,” and “We are profoundly, and I think I would say unreservedly, sorry at the turn of events.”…

Aside from its impact on the economy, the process also changed British society. “Great Britain developed from a nation of savers into a society of borrowers,” says Augar, “and from a nation of investors into one of traders, no longer oriented toward long-term profits but interested only in short-term gains.”

…Mervyn King, the governor of the Bank of England, has warned his fellow Britons of difficult times ahead and what may be “the worst recession” since World War II…

British taxpayers have already had to bail out two banks, the Royal Bank of Scotland and HBOS. Two mortgage lenders have also been nationalized, and the government, like other governments around the world, is considering a plan to guarantee all toxic securities.

In Great Britain, new borrowing will comprise 9 percent of GDP in the coming year. According to the Institute for Fiscal Studies, it will take the United Kingdom until 2030 to bring its national debt back to pre-crisis levels. Some are already referring to London as “Reykjavík on the Thames.”

The negative numbers have also weighed heavily on the British pound, which has lost 17 percent of its value as a result of the recession, the currency’s sharpest decline since 1992. Major US investor Jim Rogers warns: “I don’t like to say it, but I wouldn’t invest any more money in Great Britain.”

Instead of being the “sick man of Europe” it was in the 1970s, Great Britain, as the Times predicted, is fast becoming the “sick man of the world.” The country is firmly in the grip of deep uncertainty.

“We have become a ‘fear nation,'” says author Tony Parsons. “Everyone is afraid: the people, the banks, everyone.”

A ’21st Century Dickensian Society’

Parsons, 55, is sitting in the Café Rouge in London’s exclusive Hampstead neighborhood, home to the rich and bohemian alike. More millionaires live in Hampstead than in any other community in the country. Parsons, the author of the bestseller “Man and Boy” and one of these affluent residents, writes about Britain’s prosperous middle class. He is familiar with its soul and is an avid consumer himself, as evidenced by the Prada windbreaker hanging on the back of his chair. But, as he points out, this is the first year he has decided not to buy a new BMW X5.

“What is happening now is like the fall of the Berlin Wall,” says Parsons. “People look at this ideology and realize that it hasn’t worked. We cannot have unregulated capitalism. We cannot tell these people to do as they wish, and hope that a lot of money comes out in the process.” http://www.spiegel.de/international/europe/0,1518,609391,00.html

The UK will not be exempted (though it may try to be) from the great tribulation that will affect the USA and its Anglo-allies. The UK could benefit from national repentance, but that seems as unlikely as the USA repenting. Hence, if they do not both repent soon together, they will both relatively soon cease being independent nations together.

Perhaps the most telling quote, which is true of both the US and the UK, in the above article was:

“Great Britain developed from a nation of savers into a society of borrowers,” says Augar, “and from a nation of investors into one of traders, no longer oriented toward long-term profits but interested only in short-term gains.”

But the real reason for the current economic problem is not bankers. The real reason is that the Anglo-American nations should have known better than to live farther and farther apart from what is taught in the Bible:

7 And the borrower is servant to the lender (Proverbs 22:7).

The Bible is clear that debt is a curse that those that do not heed the Bible’s warnings should expect:

43 The alien who is among you shall rise higher and higher above you, and you shall come down lower and lower. 44 He shall lend to you, but you shall not lend to him; he shall be the head, and you shall be the tail. 45 Moreover all these curses shall come upon you and pursue and overtake you, until you are destroyed, because you did not obey the voice of the LORD your God, to keep His commandments and His statutes which He commanded you. 46 And they shall be upon you for a sign and a wonder, and on your descendants forever.

47 “Because you did not serve the LORD your God with joy and gladness of heart, for the abundance of everything, 48 therefore you shall serve your enemies, whom the LORD will send against you, in hunger, in thirst, in nakedness, and in need of everything; and He will put a yoke of iron on your neck until He has destroyed you (Deuteronomy 28:43-48).

Debt is a curse.

But why the Anglo-American nations?

Recall that Jesus taught:

For everyone to whom much is given, from him much will be required; and to whom much has been committed, of him they will ask the more (Luke 12:48).

The Anglo-American peoples truly were given much. Now, we are getting to the point where much will be required.

Several articles of related interest may include:

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Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? When does the six thousand years of human rule end?
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Can the Great Tribulation Begin in 2009, 2010, or 2011? Can the Great Tribulation begin today? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord?