The impact that a recession has on the economy

The U.K. slow down i.e. people have reduced spending, produces a slow down in production and this produces cut backs. So many industries are feeling the squeeze, retail, building and development, importing & exporting, travel, car trade, etc, etc,… this climate is very uncomfortable for most businesses to consider investing or expanding. The banks are also very concerned and sit on the side of caution, and don’t forget we have the media constantly talking about falling houses prices and the ever going number of people facing repossession in the U.K, and don’t forget this is also happening in the U.S.

We often talk about the world becoming smaller because of planes, trains, bigger boats & internet. This recession is global, the EU and the US and the general slowdown is making things extremely difficult for exporters.

The combined total spending power amounts to approximately 75-80% between companies and households. The impact of the slow down is making the gap in the economy larger and larger, and even with all of the efforts of the Bank of England, Alistair Darling confirms himself that he doesn’t know how long we will be before we begin to creep towards the good times. Just reducing interest rates isn’t doing enough to pull us through just yet, which gives much concern to people that are already financially up against the wall.