Some of you have asked me to comment on how the worldwide financial crisis is affecting life here in England.
Bank bailouts and prop-ups have been going on here, too, and the local employees of some failed American companies have not fared well at all. For example, when Lehman went under, its upper management was guaranteed their nice golden parachutes to the tune of multi-millions, while their 5,000 UK employees were shown the door.
The failure of several large Icelandic banks threatens to have serious effects here. Some 300,000 Brits had their money in these banks and, worse yet, hundreds of local Councils (city and county governments) "loaned" a lot of money to these banks on the promise of double-digit investment returns. The banks have folded, the Icelandic government has nationalized several of them, and there’s no word yet about the money invested or kept on account there. Where the Councils are concerned, this could have an adverse effect on everything from child care services to road repairs.
On a day-to-day basis, I’m not personally affected at all. In general, prices have not jumped (beyond their usual insanely expensive levels) nor has there been a visible flood of the unemployed. Businesses are clearly taking a conservative approach to spending now, however, and this may be "the calm before the storm", based on the comments I hear from local acquaintances.
The exchange rate has been affected, too, with the British Pound dropping to only 1.69 US dollars. This, of course, is a good thing for me as I am paid in US dollars, but the papers here are wailing that the Pound’s decline has made England the "poor sister" of Europe. What does that make the US, with its moribund currency, I wonder?