Financial crisis goes global
- Image by orangetab via Flickr
Payday loans have recently grown in popularity in the United Kingdom, a sign that families are struggling to keep up with their expenses. Between August 2007 and June 2008 the amount of payday loans lent in the U.K. increased 130 percent.
When individuals and families start to struggle with finances, the country is usually not far behind. Sure enough, it’s official, the U.K. is in recession. So all you Americans who need payday loans to make ends meet, you’re not alone. Our English, Irish, Scottish and Welsh brothers and sisters feel our pain.
A familiar story
Much like the situation in the U.S. last year, there was debate going on for some time about whether the U.K. was truly in a recession. But after a 1.5 percent decline in the region’s Gross Domestic Product in the fourth quarter of 2008, there is no more denying it. The sovereign state’s GDP also fell the previous quarter, and officially a recession is defined as two consecutive quarters of decline in the GDP.
The U.K.’s last recession was in 1991. The last half of 2008 represents the biggest drop in GDP the country has experienced since 1980. The drop also represents a drop in the value of a pound. Even with the declining value of a dollar, the value of a pound fell in comparison. A pound usually buys about $1.50, but now the pound is worth roughly $1.35. Looks like payday loans are a better bet than investing in foreign currency.
Unemployment in the UK
Reading through the news stories on BBC.com is eerily reminiscent of reading a United States newspaper. Stories on the unemployment rate are filled with lists of companies that have laid off or plan to lay off hundreds of workers.
The unemployment rate in the UK in November hit 6.1 percent in the quarter that ended in November. The number of people collecting unemployment rose in December, and new figures on the unemployment rate will be calculated at the end of February.
Old boys’ club?
In the U.S., a case just went through the court making it easier to file sexual discrimination lawsuits based on salary differences. It seems the U.S. isn’t the only country still struggling with sexual discrimination. In the U.K., women are being laid off more than men.
The number of women being laid off (or, “being made redundant” as they say over there) increased by 2.3 percent since last year. That is double the rise in male employees being laid off. Studies say this discrepancy is because many layoffs are happening in the hospitality and retail industries, and more women than men work in those fields.
More parallels
Leading economists in the U.K. have predicted the recession will last for a year and a half to two years. If their predictions are correct — and U.S. economists’ predictions are correct — the recessions in the two countries will end at about the same time. Of course, because the U.S. has already been in recession for a year, that would make the U.K.’s recession a bit shorter than the one in the U.S.
But Americans all know how deceptive predictions can be. I haven’t seen any predictions about whether payday loans will continue to gain popularity in the U.K., but if I did I’d be skeptical anyway.
We all knew that if the United States went into a recession sooner or later the rest of the world would catch up with us. So to me it is no surprise that the UK is in a recession now, I just hope they don’t have to endure the same tedious long drawn out firings that the United States has gone through lately.
The current economic condition in the U.S. affects the worldwide. We are in fact the leading country in the world and almost every relies on our economic system. It’s clearly obvious that we are undergoing one of the worst recession since the depression.
My prediction: Women are going to rule the world in the near future. All you discriminators (you know who you are) had better change your ways or watch out!