The UK Economy Keeps Sinking

The Bank of Ireland's statement this morning that it was running down its UK mortgage business - with a total of £29 billion in outstanding loans - is a small but telling illustration of why this is going to be a very tough recession for the UK. It is precisely those flows of forign capital that have kept the UK so bouyant. Thirty billion here and there soon adds up. But those taps are now being turned off. With sterling getting pummelled it will be a long time before anything replaces it. The UK will have to re-balance itself more towards exports but it will be a long hard struggle.