The Collapse of the High Street and Its Wider Economic and Business Implications.
The Collapse of the high street and its wider economic and business implications.
Image:Colchester high street showing tough times with stores closing at a rapid rate.
The warning signs of a crumbling economy in Britain can be seen as far back as 2007, with New Century Financial specialising in sub prime mortgages filed for Chapter 11 bankruptcy protection. With the banks being sold many of NCF’s debts, so began the collapse of the sub prime mortgage market. The impact of this collapse was soon felt by banks on a global scale. Later in July Investment bank: Bear Stearns tells its investors they will not receive any money due to rival banks not providing a bailout.
In Britain Northern Rock were amongst the first to feel the media coverage of what was revealed as just the beginning of an economic decline, Little did the public know just how deep we were about to go into decline.
Fast forward one year later and Britain is on the brink of a recession House prices have fallen by 10.5% and Chancellor Alistair Darling warns that Britain is facing its worst crisis in 60 years.
In the US the government bailed out Fannie Mae and Freddie Mac accounting for almost half of the outstanding mortgages in the USA, it was seen as one of the biggest bailouts in history.
This side of the pond in the UK, Lloyds TSB announced that it will take over HBOS one of the UKs biggest mortgage lenders.
Jump to today and Britain 's economy has avoided a triple dip recession. "The Office for National statistics said its preliminary estimates for gross domestic product (GDP), showed the economy grew by 0.3% in the first three months of the year." (1) However our minds are still fresh from the UKs embarrassing blow earlier in the year, by losing its AAA credit rating, from one of the worlds leading credit rating agencies Moody 's. Now at AA1 this is the first time in Britain 's economic history that it has had a less than perfect rating. This came as an even bigger blow for
Image:Colchester high street showing tough times with stores closing at a rapid rate.
The warning signs of a crumbling economy in Britain can be seen as far back as 2007, with New Century Financial specialising in sub prime mortgages filed for Chapter 11 bankruptcy protection. With the banks being sold many of NCF’s debts, so began the collapse of the sub prime mortgage market. The impact of this collapse was soon felt by banks on a global scale. Later in July Investment bank: Bear Stearns tells its investors they will not receive any money due to rival banks not providing a bailout.
In Britain Northern Rock were amongst the first to feel the media coverage of what was revealed as just the beginning of an economic decline, Little did the public know just how deep we were about to go into decline.
Fast forward one year later and Britain is on the brink of a recession House prices have fallen by 10.5% and Chancellor Alistair Darling warns that Britain is facing its worst crisis in 60 years.
In the US the government bailed out Fannie Mae and Freddie Mac accounting for almost half of the outstanding mortgages in the USA, it was seen as one of the biggest bailouts in history.
This side of the pond in the UK, Lloyds TSB announced that it will take over HBOS one of the UKs biggest mortgage lenders.
Jump to today and Britain 's economy has avoided a triple dip recession. "The Office for National statistics said its preliminary estimates for gross domestic product (GDP), showed the economy grew by 0.3% in the first three months of the year." (1) However our minds are still fresh from the UKs embarrassing blow earlier in the year, by losing its AAA credit rating, from one of the worlds leading credit rating agencies Moody 's. Now at AA1 this is the first time in Britain 's economic history that it has had a less than perfect rating. This came as an even bigger blow for
References: (1) BBC News. (2013). UK economy avoids triple-dip recession. Available: http://www.bbc.co.uk/news/business-22290407. Last accessed 25 April 2013. (2) Duncan,H. (2013). Talk of high street death is premature. Available: http://www.thisismoney.co.uk/money/markets/article-2264679/HUGO-DUNCAN-Premature-talk-high-street-death.html. Last accessed 15th April 2013 (3) Coby,A.S (4) Chahal, M. (2013). Open all hours: the future of the high street.Available: http://www.marketingweek.co.uk/trends/open-all-hours-the-future-of-the-high-street/4005606.article. Last accessed 24th April 2013. (5)Chahal, M. (2013). Open all hours: the future of the high street.Available: http://www.marketingweek.co.uk/trends/open-all-hours-the-future-of-the-high-street/4005606.article. Last accessed 24th April 2013.