Feeling the pinch

Huddersfield Daily Examiner (Huddersfield, England), April 22, 2009

THE current economic downturn began in the US, where a rise in interest rates between 2004 and 2006 led many homeowners to default on their mortgages.

The first major sign of trouble in the UK came in September 2007 when Northern Rock was given emergency support by the Bank of England to stop it collapsing.

In September 2008 banks began to fail in the UK, US and Iceland. The following month the British government pumped pounds 37bn of taxpayers' money into Royal Bank of Scotland, Lloyds TSB and HBOS.

In October the US government announced its own pounds 143bn bank bailout plan..

On January 23, Britain officially went into recession with the announcement of a drop in GDP of 1.5% in the fourth quarter of 2008.

On April 2 the leaders of the world's largest economies agreed to spend pounds 1.1 trillion to solve the global crisis.

There are now more than two million unemployed people in the UK - the highest number since 1997.

Retail sales fell 1.2% in March, the ninth drop in the last 10 months.

Two million householders are now in negative equity because of falling property prices.

Yesterday the Government announced that the country had gone into deflation for the first time since 1960..