Worst economic crisis in 60 years

In the UK, house prices are now falling at double digit rates, and over the weekend the Chancellor fired a stark warning shot about the severity of the downturn. Alistair Darling told the Guardian, that the UK faces its worst economic crisis in 60 years and said the downturn would be more "profound and long-lasting" than most had feared.

According to Nationwide, UK house prices fell for the tenth consecutive month in August, down almost 2% since July. The annual rate of decline accelerated to 10.5%. This is the fastest (and only double digit) decline since Nationwide started collecting monthly data in 1991. With mortgage approvals continuing to slide in July (to 33k), it looks like further price falls are on their way.

House prices are falling at their fastest rate in 18 years, leading to fears of a wave of repossessions. Mortgage lending has slowed dramatically due to the credit crunch while key indicators have suggested that the economy could be poised to go into recession. A member of the Bank of England's Monetary Policy Committee has said that radical action was needed to ensure the crisis did not get worse and warned of a sharp rise in unemployment. There is no growth at all right now, which technically means we are close to a recession. Inflation is rising, unemployment is rising, the cost of living is going up and people are nervous about jobs. Britain is ill prepared due to money not being put aside for a rainy day. Gordon Brown has borrowed far too much. It will be many months ...and probably another year... until there is good news on this front.

So what should we do now?

1. We need strong, clear leadership from the Prime Minister and the Chancellor. They need to speak with one voice instead of the Chancellor saying it is the worst economic crisis in 60 years and Gordon Brown saying it is not as bad as we think. We don't need a disfunctional government right now. It does not bode well for economic recovery. They need to tell us how they are going to get us out of this mess.

2. We need a vision for the future on how we resolve this economic downturn. George Osborne is proposing to:
a) Help people with current economic problems e.g put fuel duty down when the oil price goes up
b) Take first time buyers who need a mortgage out of stamp duty so that they can get on the housing ladder
c) Help low income families to get direct debit rates for gas and electricity bills
d) Reorganise public finances so that we never again borrow recklessly in a boom and are more prepared for a slow down in the economy.

In summary, what we need is a new government that does have a vision and speaks with one voice. We need a change for the better ... a Conservative government.