Financial Crisis Has Odd Effects in UK
In a bizarre twist of political fate Britain’s Prime Minister Gordon Brown has actually gone up in the polls of late after his fate was unsettled in the lead-up to his annual party conference last month. Despite the fact he had a hand in the country’s financial situation, as Chancellor of the Exchequer for 10 years, the public seems to think that he is the best man for the job.
It surely helps that his plan has been adopted by the rest of Europe as they slowly realized that their “European model” of banking did not make them immune from banking problems. In fact at one point one European bank per day was announced to be in financial trouble. In an unprecedented move Gordon Brown was invited by Sarkozy to an emergency meeting of the Eurozone countries, even though the UK is not part of it. The whole debacle may in fact end the Euro in its current form, at least with its current number of members, and pretty much assures the UK will never be a member.
As with the U.S., most people on High Street (U.K.'s Main Street) had no sympathy whatsoever for the bankers who were losing their jobs in the city of London by the thousands. The bite is starting to show as the UK government has finally had to admit that the level of unemployment in the UK is going up quickly:
Official figures show that the jobless total leapt by 164,000 between June and the end of August. The higher-than-expected increase -- of 0.5 percentage points to 5.7 percent -- is the biggest since 1991 and the eighth successive monthly rise.
Not only that, but the Treasury has finally had to admit that growth has slowed significantly and that inflation is higher than previously admitted. These two effects are rather obvious to most people on the street here.
In the light of the unprecedented semi-nationalization of eight leading British banks by the British government that was announced last week, there are repercussions not quite imagined.