THE LOOMING RECESSION
The UK economy shrank by 0.5% in the three months between July-September, after sixteen years of growth. The government is now predicting that the economy will continue to decline through most of 2009 but recover in 2010.
RISING BUDGET DEFICIT
The economic slowdown will dramatically increase the budget deficit to levels not seen since the recession in the l990s.
The total government debt is now projected to rise to £1 trillion, up 50% to nearly 60% of GDP..
Unemployment is now rising rapidly, and some forecasters are predicting that there will be 3 million unemployed by the end of next year, based on the ILO measure that the government prefers.
The pound has declined sharply on international currency markets, and hit record lows against the dollar and euro.
THE PROPERTY SQUEEZE
House prices in the UK peaked in the autumn of 2007 and are now falling at the fastest rate since the 1930s, as mortgage availability dries up.
INFLATION PEAKS AND FALLS BACK
Inflation rose sharply over the summer of 2008 with rising food and oil prices, but is now falling. There are fears it will turn negative, leading to deflation. The Bank of England's target rate of inflation, set by the government and based on the CPI, is 2%.