The UK is heavily reliant on its financial sector, and the financial crisis has been affecting its people more than other Europeans. Even the Queen is feeling the crunch and is forced to strict control of her budget.
Mike Polson used to be an IT engineer for the financial services company JP Morgan. When the credit crunch was only just starting he took up plumbing lessons – as a precaution. When the crisis hit he was well placed to change career and got a job as a plumber. “I started to get disillusioned with the City. So I decided to go into plumbing – people will always need that,” Mike explains. The financial crisis has hit people at all levels of British society, even the Queen. One British tabloid reported that Buckingham Palace may even run out of money in three years. Its pleas to the government for extra cash have been refused forcing it to make cutbacks – just like any ordinary homeowners facing escalating prices for fuel, food and home repairs. In a dramatic announcement before the stock market opened on Monday, three British banks received the ultimate humiliation – and helping hand – when the government announced a 37 billion pound rescue package. It means the taxpayer now has a large stake in Lloyds TSB, Royal Bank of Scotland and HBOS. “I think a lot of banks have been humiliated but frankly pride goes before the fall. We had an awful lot of pompous bankers over the years – telling the people that they had a magic formula to make an awful lot of money and asking for bonus as well. Now of course you find that’s just not true,” says Justin Urquhart-Stewart from Seven Investment Management. Prime Minister Gordon Brown has said the bailout was ‘unprecedented but essential’: “In extraordinary times, with financial markets ceasing to work, the government cannot just leave people on their own to be buffeted about,” he said. As consumers feel the bite, retailers are seeing slowing sales and people resorting to new methods to save money. The leading person-to-person online shopping website in the UK had its busiest ever month in September 2008. Newspapers and magazines are also full of advice on how to save and survive without spending a fortune. Credit Crunch Couture! – that’s the new advice to fashionistas who are watching their pennies. “Revamping or making it yourself” is in fashion these days. With no money in their pockets and uncertainty looming over the future, people are starting to use their imagination to help them get through tough times. Will financial crisis turn G7 into G14? Could the financial crisis save the environment? Britain bails out its banks as Medvedev calls for change to global financial architecture