April 20 - British finance minister Alistair Darling
presents his annual budget to parliament on Wednesday and is set
to take an axe to his economic forecasts and admit the economy
looks set for its deepest downturn since World War Two.
Here is a timeline of the British economy since the U.S
sub-prime lending crisis caused credit markets to seize up,
triggering a run on U.K. mortgage bank Northern Rock.
Sept 2007 - Northern Rock says the Bank of England has
stepped in to provide support, triggering the first run on a
major British bank in over a century following the U.S. subprime
Feb. 2008 - Darling announces the temporary nationalisation
of Northern Rock after rejecting two bids - from Virgin and a
rival 'in-house' offer led by the bank's management team - to
take it over.
April. 2008 -- The BoE unveils the Special Liquidity Scheme
to swap banks' risky mortgage assets for at least 50 billion
pounds of government debt.
Sept. 2008 - Lloyds TSB agrees to rescue rival HBOS in a bid
to scoop up Britain's biggest home loan lender to create a 28
billion pound ($40.89 billion) mortgage company.
Sept. 2008 - Bradford & Bingley, the country's ninth-biggest
mortgage lender, is nationalised. The Treasury said it would
take over B&B's 50 billion pound mortgage portfolio and sell its
deposits and branches to Spanish bank Santander.
Oct. 2008 - The government bails out three major banks -
Royal Bank of Scotland, Lloyds TSB, and HBOS with a 37 billion
pound cash injection aimed at strengthening their capital
reserves in the face of the credit crunch.
Nov. 2008 - The BoE makes a shock 1.5 percentage point cut
in interest rates to just 3 percent, their lowest level in more
than half a century.
-- BoE governor Mervyn King says the economy will shrink
sharply in 2009 and inflation could fall below 1 percent in two
-- Darling says he will cut sales tax and extend help for
small businesses, low earners and households in a new stimulus
package worth some 20 billion pounds.
-- The board of high street store Woolworths places its
retail business and entertainment wholesale distribution
business into administration.
Jan. 2009 - The BoE cuts interest rates by 50 basis points
to a record low 1.5 percent. The rates are now at their lowest
level since the bank was founded more than 300 years ago.
-- Britain launches a second bank rescue plan, under which
the BoE will set up an asset purchase programme to buy private
sector assets with an initial fund of 50 billion pounds.
-- Britain's public finances deteriorate sharply as the
recapitalisation of ailing RBS blows out the deficit to 44.2
billion pounds last month, its highest on record.
-- The pound falls to a 7-1/2 year low against the dollar
below $1.38 on Jan. 21 as worries about the banking sector and
public finances continue to batter the currency.
-- Britain enters recession for the first time since 1991 as
official figures show output has contracted by 1.5 percent in
the final three months of 2008. The economy is shrinking at its
fastest pace since 1980.
Feb. 2009 - The BoE cuts interest rates by another 50 basis
to another record low of 1.0 percent.
-- The Royal Bank of Scotland reported on Feb. 26 reported a
loss of 24.1 billion pounds ($34.3 billion) for 2008, the
biggest in UK corporate history.
March 2009 - The BoE cuts interest rates by another 50 basis
points to 0.5 percent, and says it will buy assets worth 75
billion pounds in a drive to help the British economy by
expanding the money supply.
-- British industrial output, which makes up 18 percent of
the economy, falls 2.6 percent in January alone and is down 11.4
percent on a year ago, official data shows.
-- The economy shrinks even more abruptly than expected in
the last three months of 2008 - by 1.6 percent, the sharpest
decline since 1980.
-- The ILO measure of unemployment rises by 165,000 in the
three months to January to 2.029 million -- the highest since
the ruling Labour party took power in 1997.
April 2009 - G20 leaders gathering in London, agree to
commit new resources of $1.1 trillion available to the world
economy through the IMF and other institutions.
-- Darling acknowledges he does not expect Britain to come
out of recession before the end of the year at the earliest.
-- The BoE leaves interest rates unchanged for the first
time since September and says it will continue with its asset