Early estimates of a contraction in the U.K. economy were not enough. First quarter 2009 estimates were revisited, showing a 2.4% fall in gross domestic product from the last quarter of 2008 to 2009. This downward revision made the first three months of the year the worst since people wore skinny ties, hated communism, and bore nicknames like "Buzz."

In the second quarter of 1958, U.K. GDP plummeted 2.6%, though the 2.4% threshold matches the depths hit in 1979. The original 2009 Q1 estimate was -1.9%, according to the Office for National Statistics in London.

When the economy gets tough, eat fried chicken. This must be the mantra of many Britons; at least, that's the way Yum! Brands (NYSE: YUM) is betting. The company this weekend announced it was opening 200 to 300 new stores in north England and south Wales over the next few years, increasing its current concentration by about 30%. On top of relatively good earnings reported for the fiscal fourth quarter earlier this month, Yum! Brands is looking almost ... optimistic. Could it be?

It could. Not only is KFC opening outlets in England and China as the rest of the world cowers in job-cutting fear of the Things To Come, but the stock is in a hopeful place; at about $28.70 this afternoon, up 0.24% on the day and, having recovered from a low near $22 in November 2008, seemingly headed in an upward arc toward its year-ago territory above $35. At this price, and with this great hope for the future, KFC could be a good buy.

The global financial catastrophe continues. With the Dow having Jones industrial average having lost $2.8 trillion in value since the day before investors thought the U.S.'s $810 billion bailout plan to save the world would pass, Asian markets cratered today. And the U.K. announced a plan much closer to the one that the U.S. should have been pushing. Maybe it's not too late for us to get it right.

How bad is the carnage in Asia? Japan's Nikkei collapsed 9.4% to close at 9203.32, its biggest one-day percentage drop since 1987 -- it peaked in the late 1980s at around 40,000. Australia fell 5%, South Korea declined 5.8%, Hong Kong tumbled 7%, and Indonesia shut its market for the second time in its history after stocks there plunged over 10%.

Meanwhile the UK did what the U.S. should have done to prop up its banks -- it injected capital into its strongest banks and took back preferred stock. Specifically, the UK bought $88 billion worth of preferential shares in its eight largest banks and building societies. The Bank of England will make $352 billion available for short-term loans and has created a $440 billion loan guarantee fund. And the plan seems to be working as far as boosting investor confidence -- HBOS, one of the capital recipients, saw its stock rise 58%.

Let's hope U.S. leaders get the message from across these ponds.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

The United Kingdom's economy was unchanged in Q2, weighed-down by the contracting housing sector and a pull-back in consumer spending, the U.K.'s Office for National Statistics announced Friday.

Economists surveyed by Bloomberg News had expected the U.K.'s economy to grow 0.1% in Q2.

For the last 12 months, the U.K. grew at a 1.4% pace, the ONS said.

Further, the lack of growth in Q2 ended Britain's longest expansion in more than a century, London-based economist Mark Chandler told BloggingStocks Friday. The U.K.'s last recession occurred in 1991.

U.K. mirrors U.S. slowdown?

Further, as in the U.S., Chandler said concern is growing in the U.K. that declining housing sales and median home prices will serve as a drag on the U.K.'s economy through 2009, perhaps longer.

"Estimates vary in the United States, but I put housing's contraction effect at about 0.7-1.0% of GDP in the U.S., and perhaps a little lower in the U.K.," Chandler said. "Home equity loans were not as common during the housing boom as in the U.S., and that's why I don't think the slump will hurt as much here as in the U.S., but we're still seeing at least two quarters of negative growth, which will slow regional growth, as well."

U.K. home repossession claims by mortgage lenders increased 16% from a year ago to their highest level since the early 1990s, Bloomberg News reported Friday.

The U.K.'s Ministry of Justice said possession claims, the first step in the foreclosure process, increased to 38,688 in Q1 2008, from 27,530 in Q1 2007, Bloomberg News reported.

Anglo-American housing slump

London-based economist Mark Chandler told BloggingStocks Friday the large foreclosure rise indicates that the air is easing out of the housing balloon, and that the housing correction that began in the United States, is "clearly washing shore in the U.K."

Apple Inc. (NASDAQ: AAPL) has agreed to lower its iTunes prices in Great Britain to align them with its prices in the rest of Europe, settling an antitrust case brought by EU regulators.

According to The New York Times, "The European Commission accused Apple last spring of unfairly charging British consumers more than their counterparts in the euro zone for tracks from iTunes, the dominant online music vendor. British consumers typically pay 79 pence, or $1.55, a song while iTunes stores in the euro zone charge 99 euro cents, or $1.46."

Thank goodness the European Commission is there to put a stop to consumer gouging like that! On a slightly more serious note, I consider myself as pro-consumer as it gets -- but do people really need the government stepping in to tell companies to lower their prices on song downloads by 9 cents? Plus, exchange rate fluctuations could make this ever more complicated. Downloading music in Europe could turn into the new FOREX.

In any case, government intervention on something as trivial as this is almost as silly as congressional hearings about Roger Clemens' use -- or lack of use -- of steroids.

Don't our elected and appointed officials have anything better to do? Perhaps issues like this keep them from messing up anything more important.

Take Two Interactive's (NASDAQ: TTWO) Rockstar Games was expected to release its latest game, Manhunt 2, on July 10 for Nintendo's (OTC: NTDOY) Wii and Sony Corporation's (NYSE: SNE) PlayStation 2 consoles. However, Britain, America's friendly Democratic neighbor, has banned sales for -- get this -- "unremitting bleakness and callousness of tone."

I think that is how my mother referred to my dress code back in high school.

The banning comes after a 14-year old British schoolboy was murdered by a friend, Warren Leglanc, age 17. The parents of the schoolboy blamed a video game for their son's death. Patric Pakeerah, the father of the murdered boy, welcomed the decision, saying "It's a video instruction on how to murder somebody; it just shows how you kill people and what weapons you use."

I'd hate to see if Mr. Pakeerah ever watched prime-time television. Or the news, for that matter.