One of our global partners, Britain, is in an economic tsunami. Here are some recent indicators of the damage being done to Britain's economy:
- The annual rate of decline in industrial output has reached an alarming 12%.
- Manufacturing output fell by 6.4% in three month to January, faster than the 4.9% contraction in the quarter ended in December.
- During the last few months, GDP shrunk by 1.5%. The trends are pointing to a 4% decline in 2009. The last time Britain saw such a sharp decline was in 1931, with a fall of 5%.
- Manufacturing has failed to rebound even though the British pound has fallen. Usually this would help exports.
- The National Institute for Economic and Social Research warned that the economy's decline is gathering pace. It estimates that output fell by 1.8% in the three months ending in February, after a fall of 1.7% in the three months ending in January.
- More job losses are being announced on a weekly basis.
Why should we be concerned about Britain? Since world economies are interconnected what happens in one country will send ripples throughout the world. Britain is a major player on the European stage and most likely Britain's troubles will find their way across the channel.
Do you believe that Britain's troubles will affect the US?
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