UK News

Insights from the UK and beyond

Brown’s Scotland likely to be hit worst in recession

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The Labour Party may have won the Glenrothes by-election this week, partly on the back of the Prime Minister’s handling of the financial crisis, but Gordon Brown’s Scotland is predicted to suffer more than the rest of Britain during the economic downturn.

Scotland was named European Region of the Future for the second time in four years by the Financial Times’ fDi (foreign direct investment) magazine this year.

But figures show its growth is likely to lag behind the rest of the UK during the oncoming recession.

According to the Scottish Item Club’s 2008 Economic Prospects report, the Scottish economy is estimated to have grown 1.8 percent in 2008, 0.3 percent less than the UK’s rate. By 2009, this gap will have worsened to 0.6 percent. 

Will the bank package work?

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creditcrunch.jpgThey were widely accused of dithering earlier this week but Gordon Brown and Chancellor Alistair Darling have now finally caught up with events and have tried for the first time to overtake them by unveiling a 50-billion pound rescue package for the banks.

The aim is to bolster their balance sheets, increase confidence in them and get them lending again so ordinary financial life can start anew.

At last — decisive action

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blurry-screen-traders2008.jpgNewspapers generally praised the government move to shore up the banks, saying that whatever the prospects for the success of the “stability and reconstruction plan,” to have done nothing would have been infinitely worse.

They noted how fleeting the effect of the far larger U.S. bank bailout has been so far and called for the UK plan to be accompanied by cuts in interest rates by the Bank of England and concerted action on an international scale.

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