Forget everything.
Just look at this graph and think of this singular fact and its implications:
This is from the BoE website. In 2007 people took around £13,000,000,000 out of their houses by increasing their mortgage liability in exchange for cash.
Some will have spent it on buying another house (ouch). Some will have used the money to pay off other debts at higher interest rates (good). Most will have spent it on an X5, a hot tub, two holidays and a villa in Spain (living the dream).
ALL THAT MONEY - ALL OF IT - will not be spent in 2009. Alone. Without redundancy or anything else is enough to cause the failure of several airlines amidst a major recession. In the UK the whole economy is 60% consumer led. Not making, not servicing, not transporting, not mining, not anything other than consuming.
Consumer spending, ignoring ALL other issues, will be around £13,000,000,000 down in 2009 compared to 2007. That's a fact. The Government may be able to offset this a little by taxing the future. But not enough to make a big difference.
WWW