We’re now officially in a recession
23 January 2009
It’s a formality, of course — we all knew it was coming. But now that UK GDP has shrunk for two consecutive quarters it’s officially allowed to be called ‘recession’.
Sterling is at a 24-year low against the dollar — £1 is now worth $1.355. Last time we visited Chicago (last November) £1 got you around $2.
Keywords abound: grim, weak, depression, severe, deteriorating, decline, slumped, losing confidence, shrink…
Despite the government injecting £37bn into the banks they’re still not lending and still not passing on the massive rate cut to borrowers — the cheapest mortgage rate from Nationwide, for example, is 4.00%.
The BoE base rate is currently 1.5%.
However they are passing it onto savers — a regular day-to-day savings account from Nationwide currently offers around 2.00% interest.