The banking industry was engulfed by another crisis recently as JP Morgan gobbled up stricken lender Bear Stearns in a bargain deal. How will our economy deal with the fallout? Chancellor Alistair Darling has assured taxpayers that the UK is well prepared to ride out the storm, but does anyone believe him?
So, this week Mortgage Strategy asks…
Has the government done enough to stave off an economic recession?
Daniel Jenkins, 35, stage manager
I think the government is doing better than many other countries’ administrations, so yes it’s doing enough. Prime Minister Gordon Brown did a lot for the economy when he was chancellor. When you look at how it has performed compared with the US, you can see we’re in a better position.
We had the big Northern Rock crisis, but on the whole I thought that was handled pretty well.
Julie Barbosa, 28, book seller
I believe the government could do more. I think it’s inevitable that our economy will start to suffer because of what’s happened in the US, but employment is still quite stable, so maybe there won’t be a full recession.
But the government needs to do more to curb inflation – life is too expensive here.
Tom Powers, 30, website manager
I don’t think there’s much more the government could do to fight off a recession. A lot of what’s going to happen to the UK economy will depend on public confidence and how much consumers are willing to spend.
I think the media hypes up fear about a potential recession, so it will have to take a large part of the blame if we do find ourselves in trouble over the next 12 months.
Darren Baxter, 29, artist
The media could end up pushing the country into recession by exaggerating the effect of the US problems, so it will be as responsible as the government if it all goes wrong.
There’s not a great deal more the government can do at the moment – the Bank of England has been given the task of controlling inflation anyway. There seems to be a lot of speculation over whether we’re about to enter a recession, but many people get on with their lives and don’t believe it will affect them – for the moment anyway.
Julian Skinner, 44, development director
There’s probably nothing the government can do, but it shouldn’t have allowed so many consumers to borrow so much money so freely.
When I was with a building society in the 1980s, I had to save money with it for years before the mutual was willing to lend me the money to buy a home. Then Margaret Thatcher came along and changed everything. Perhaps we’ll return to those times.
David Utting, 29, doctor
Yes, I believe the government has done enough. I think Brown managed the economy well for 10 years and I think the recent ‘boring Budget’ was spot-on.
I find it relatively easy to brush off the scaremongering in the nationals about a recession.
Olivia Watkins, 29, graphic designer
I’m not an economics expert, but I don’t think there’s much the government can do to stop the problems in the US affecting the UK. But it should never have let things get so bad in terms of personal debt.
When people are getting new credit cards to pay off their existing ones, you know there’s a problem. If you don’t have the money, you shouldn’t spend it.
Will Smith, 28, visual effects artist
There are many consumers drowning in debt and that’s what the government should focus on. I doubt if this is enough to send us into recession, but perhaps more education is needed to prevent people falling into debt in the first place. But I don’t want a nanny state.
It’s difficult to work out what it means for the UK when you read about banks such as Bear Stearns.
Alastair Crawford, 33, visual effects artist
The government keeps telling us we are well positioned to deal with what’s happening in the US, but you never know. I don’t think it’s within the government’s power to do much more to prevent a recession. The Bank of England fixes interest rates so maybe it rests more on the BoE’s shoulders. It’s said that when the US sneezes the world catches a cold, but I don’t think the UK is in serious trouble.