=The 2008 Economic Crisis
In the wake of the global economic crisis of 2008, the United Kingdom economy contracted, experiencing negative economic growth throughout 2009. The announcement in November 2008 that the economy had shrunk for the first time since late 1992 brought an end to 16 years of continuous economic growth. Causes included an end to the easy credit of the preceding years, reduction in consumption and substantial depreciation of sterling (which fell 25% against the euro between January 2008 and January 2009), leading to increased import costs, notably of oil.
On 8 October 2008, the British Government announced a bank rescue package of around £500 billion ($850 billion at the time). The plan comprised three parts.: £200 billion to be made available to the banks in the Bank of England's Special Liquidity Scheme; the Government was to increase the banks' market capitalization, through the Bank Recapitalization Fund, with an initial £25 billion and another £25 billion to be provided if needed; and the Government was to temporarily underwrite any eligible lending between British banks up to around £250 billion. With the UK officially coming out of recession in the fourth quarter of 2009—ending six consecutive quarters of economic decline—the Bank of England decided against further quantitative easing.
Read more about this topic: 2000s In The United Kingdom
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