In his first parliamentary question session since last week's European leaders' summit where economics took center stage, British Prime Minister Gordon Brown has warned that many countries must brace for recession in the real economy. For VOA, Tom Rivers in London reports.
It is the first time Prime Minister Gordon Brown has publicly acknowledged what many average Britons have felt for months: that the global economic downturn is likely to cause a recession both here and elsewhere around the world. And as Mr. Brown underlined in parliament, it was serious.
|Britain's Prime Minister Gordon Brown leaves 10 Downing Street, London, to attend his first parliamentary question session, 22 Oct 2008|
"The Governor of the Bank of England said last night that not since the First World War has the international banking system been so close to collapse and I agree with him," Brown said. "Having taken action on the banking system, we must now take action on the global financial recession which is likely to cause recession in America, France, Italy, Germany, Japan and because no country can insulate itself from it, Britain too."
Mr. Brown said he looks forward to attending a summit of world leaders soon to discuss cooperative economic recovery measures. That gathering will be held in the United States sometime shortly after the November presidential election.
With the British economy shrinking, Mr. Brown is facing many of the same problems being felt elsewhere in the developed world, such as rising home foreclosures that have nearly doubled during the past 12 months.
In the House of Commons, the prime minister outlined new plans to combat that alarming trend.
"Mr. Speaker, I can announce today new guidance - new guidance for the judiciary to halt or adjourn court action on repossessions unless alternative options that help the homeowner including extending the terms of the mortgage, changing the mortgage type and deferring payment have been fully examined first of all. We are determined to do everything we can to help homeowners avoid repossessions," he said.
But the economic fight back will take time. Mortgage approval rates are down by more than 70 percent this year compared to 2007.
Unemployment is rising and that is expected to continue into 2009. And the pound has slipped to a five-year low against the U.S. dollar.