Chapter 3
The End of Growth
“The £ was trading this morning at 10.00hrs GMT at 1.13 euro making the euro worth £0.885.
Britain is now formally in recession having this morning recorded two consecutive quarters of negative economic growth.”
‘Only an accountant, and a chartered one at that could come up with such tortuous language’ thought Harry. ‘What it means is clear enough though. The bubble has burst. Britain’s much vaunted austerity policy has finally collapsed and the egg is firmly all over our faces.’
Deflation of the UK economy was officially recorded at 0.2% for the month. The Footsie 100 remained steady at around 4031.
The next day’s headline in the ‘Guardian Online’ shrieked alarmingly at him over his breakfast table.
“ISIS FORCES TAKE CONTROL OF BAGHDAD!”
Harry had never known a ‘Guardian’ headline to shriek at him before. There was a lot of stuff about the Iraqi Government forces withdrawing South in disarray, speculation about what the Americans might do. A counter-offensive by Assad government forces in Syria against an equally well armed and jihadist Islamic State incursion was supported by at least by some of the Syrian rebels and the Israelis reminding them all that incursions into their territories would not be tolerated. It was beginning to look as if a disintegrating Libya and an unstable Egypt might be drawn into what was promising to be a cataclysm swallowing up much of the Middle East. It was on the cards that Jordan could be overrun, inevitably drawing in a Hamas controlled Lebanon and the West Bank.
Only Algeria was keeping out of it for the time being, protected by a hastily drawn-up and unlikely-seeming non-aggression treaty with the Saudis in which Riyadh promised aid to their oil-dependent and now near-bankrupt economy in the face of a further slumping in global oil prices.
In an equally unlikely and surprise move, the Iranians gave the US government leave to deploy an aircraft carrier in the Gulf. It was reputed that it would be carrying nuclear weapons.
Harry had never been able to get his head around the intricacies of the Middle East and its seemingly endless interstate conflicts but this was beginning to look dangerous by any standards.
Towards the end of a day of confusion and frantic diplomacy which was serving only to raise the tensions between the various players the Russian Bear awoke. Soviet Era military hardware began to arrive in the Ukraine and Russian Federation warships began heading into the Baltic. Russian SU34 strike aircraft were seen over the North Sea and flying what looked like an aggressive sortie into the English Channel although this was denied by the Kremlin following protests by NATO, France, Germany and Britain.
Stockmarkets everywhere plunged in a panicky day of confusion, echoing the neurotic reactions of some of the Hedge Fund managers as they sought to cover increasingly shaky positions. The footsie 100 closed 337 points lower at 3526. At the same time, the pound came under pressure against the euro over nervousness about how the British might react in an increasingly divided Eurozone and dipped to 1.08, the lowest since the near-parity days of Gordon Brown’s UK premiership making the euro worth £0.926.
The German Chancellor was said not to be amused. Eurofighters were deployed to overfly the Adriatic in a show of force and European Union solidarity. The Italian Government, already at its wits end over the influx of North African refugees, declared a State of Emergency.