How the cash crisis is affecting the UK

President Bush's bail out plan was rejected by US politicians

All these words get bandied around like we're supposed to know what they mean - economic downturn, global credit crunch, banking bail-out.

Even the numbers are mad. In the US, politicians have voted against a bank bail-out deal that would have cost $700 billion.

As a result, a trillion dollars were wiped off the value of US shares. That's 1,000,000,000,000 - 12 zeroes!

So there's less money swilling around. And that's clearly bad news for city-types in places like London and Edinburgh, with their pin-stripe suits and their Porsches.

But what does it mean for the rest of us?

Harinder Sarpal, who runs an electrical goods shop, says it's already affecting his business: "It's going down, down, down. Obviously the last few months have been really bad."

When Newsbeat visited Harinder's shop, there were no other customers - and that's a worry.

He said: "The footfall is half of what it should be really. It has turned considerably quieter."

But Harinder reckons it's hard to plan for the future when you don't know what's around the corner.


The UK goverment had to step in to rescue Bradford & Bingley

"Obviously you try and plan and save and so on, but the long term future is very difficult at the moment. It's a matter of who can actually survive this."

The UK is already feeling the squeeze in lots of ways.

Builders and architects are getting laid off. An estate agent told Newsbeat there's hardly anybody buying houses.

No-one's been made redundant from her office yet but she doesn't feel it's very far off.

On Tuesday, we also learned that a transit van factory in Southampton is dropping down to a four-day week. They're halving their output, and they blame the economic downturn.

There are plenty of people who think we shouldn't bail out big banks.

They say ordinary people have got enough to worry about - so high rolling city-slickers should be left to look after themselves.

But the argument in favour of a bail-out is the same here as it is in the USA. If big business falls flat, we all lose out.

Supporters of a rescue plan say that unemployment would soar. More people would lose their homes. And there's a risk that some people could turn to crime to pay their way.

http://news.bbc.co.uk/newsbeat/hi/the_p_word/newsid_7644000/7644687.stm