financial crisis budgets

We have just passed what is generally considered the 10th anniversary of the beginning of the financial crisis. The event generally seen as the moment banks’ exposure to the US sub-prime mortgage market began to unravel came on 9 August 2007 when French bank BNP Paribas announced it was freezing its hedge fund assets. It was at the beginning of September, however – when images of concerned customers queuing outside Northern Rock made front pages and news bulletins worldwide – that it really became apparent that things were about to get very serious.

What followed was a series of ructions that brought the financial system to its knees – the collapse of Lehman Brothers, followed by the cliff-edge rescue of Lloyds and RBS by a desperate Treasury, which saw no way out of the biggest crisis to hit capitalism since the Great Depression of the 1920s other than resuscitation with public money.

This was just the beginning. We have been living in a perpetual state of uncertainty ever since – lingering risk aversion by lenders, austerity, depressed wages and brittle consumer confidence seemingly all constants. Arguably it was this toxic brew, coupled with a sense…