How bad are things in Britain? The Church is praying

Britain's boom now a bust
ANDREW WINNING/REUTERS FILE PHOTO
Angry workers protesting the use of foreign labour on job sites are common these days in Britain, where one in 10 workers will find themselves out of a job this year. With house prices and trade in sharp decline, the British are facing what some call the worst business conditions in a century.

Rising unemployment and falling house prices inspire new prayers from Church of England
Apr 11, 2009 08:05 AM
Les Whittington
STAFF REPORTER

LONDON–How bad are things in Britain?

Not long ago, the Church of England put out two new prayers to provide solace for those who have been laid off. "Hear me as I cry out in confusion" is a line from the "Prayer on Being Made Redundant" offered to the country's two million unemployed.

Even the Girl Guides have published advice on how to cope with the economic situation: "Don't rely on the bank of mum and dad – everyone's cutting costs," was one tip.

And, desperate to move autos, an online car broker based in Essex recently stunned the industry with this extraordinary offer: Buy one Dodge Avenger for $36,000 (U.S.) – and get another one free.

With once high-flying bankers now beholden to government for survival, house prices in free fall and the traditional economic mainstay of trade in decline, the British are facing what some call the worst business conditions in a century.

"This didn't come out of the blue, it was certainly on the radar screen," observes Thomas Mayer, Deutsche Bank's chief European economist in London.

"We envisaged all sorts of corrections. We worried about a dollar crash, we worried about housing market crashes, we even worried about the overvaluation of credit.

"But that everything would come together to create a perfect storm, I think very few people had that on their screen."

And there's no clear idea how, or when, the situation will right itself.

The country slipped into a recession in the fourth quarter of 2008, with the economy contracting by 1.6 per cent, the worst performance in nearly three decades.

Factories saw the biggest drop in production since 1974, when strikes by coal miners forced the government to dictate a three-day work week.

For 2009 as a whole, economic growth is expected to be negative 3.7 per cent as Britain feels the impact of a deepening global recession.

Chancellor of the Exchequer Alistair Darling admitted this week that he underestimated the extent of the country's economic troubles when he said last year that a recovery would begin in the second half of 2009.
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