Recession hits

Brown has at long last admitted that a recession is likely in Britain.

Mervyn King, Governor of the Bank of England, already said that this was the case on Tuesday... and most people across the country, and certainly in the city of London, could have told Gordon Brown that weeks ago.

But at least now the Prime Minister is facing the reality of the situation. We are entering our first recession in 16 years. The year ahead will be as bad as the early 90s and many people wil lose their jobs. Mervyn King also said that the British banking system had been closer to collapse earlier this month than at any time since the start of World War I.

What is a recession? Technically, it is a decline in a country's domestic economic output or GDP for at least two consecutive quarters. There have been signs of a widening economic crisis:

- Oil fell below $70 a barrel
- The pound fell to to $1.620, its lowest level against the dollar since September 2003
- Consumer spending is falling (National Institute of Economic and Social Research predicte by 3.4%)
- Business investment is down
- Private housing investment down due to falling house prices and difficulties in financing mortgages
- Rising unemployment

If the government's £50bn banking bail-out does not succeed, the recession could be even deeper and longer.

What is clear from the last few weeks .... the complete and utter failure of Labour's economic record. The PM borrowed and borrowed, and racked up the biggest government deficit in the developed world. Now we have nothing when times get tough.

Our economy is broken and we must fix it. What can we do to help? We need to rebuild an economy that is built to last.

Our solution is about fiscal responsibility, financial responsibility and a balanced economy:
- Fiscal responsibility - the Government must live within its means
- Financial responsibility - you cannot build an economy on debt
- Balanced economy - as you cannot rely on unsustainable growth in a few areas to increase prosperity for everyone.

To repair the broken society, we need need social responsibility. To repair the broken economy, we need economic responsibility.