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Page last updated at 17:00 GMT, Friday, 11 April 2008 18:00 UK

Feeling the Pinch

Declan Curry takes a balloon ride over Bristol.

Is Britain in good enough shape to survive the credit crunch?

On Monday, the BBC's Business presenter Declan Curry looks at what might be in store for UK plc.

With rising food and fuel prices and talk of recession we've been warned of a tough year ahead.

When the credit crunch began last August, many policy-makers believed that the disruption to financial markets was likely to be short-lived.

Disruption in financial markets and tighter credit conditions could lead to a slowdown in the wider economy
The expectation by many was that it would only have a small effect on the economy.

Economic downturn

Now it is becoming clear that the credit crunch is likely to last longer, spread more widely across the world, and hit economic growth more deeply than previously believed.

And it is also clear that the UK will not escape some serious effects of the downturn.

Mortgage application forms
The choice can be bewildering
The IMF's World Economic Forecast, released on Wednesday, said that the UK economy will slow sharply to a growth rate of just 1.6% in both 2008 and 2009.

The report said the UK economy would be affected by a weakening housing market, the contraction of the financial sector, and the impact on UK exports of weaker growth in the US and Europe.

Then on Thursday the Bank of England cut interest rates by 0.25% to 5%.

It is the central bank's third cut in interest rates since early December.

The Bank said that disruption in financial markets and tighter credit conditions could lead to a slowdown in the wider economy.

Panorama: Feeling the Pinch, BBC One 8.30pm on Monday 14 April 2008.

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