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What if the UK banking sector does not recover?

As we see the share price all Barclays bank fall by a massive 25% in one day, 40% in one week and only a fraction of its share price a year ago there are concerns that the UK banking sector is in turmoil. The government has poured billions upon billions of pounds into the sector and many are now asking the question "what will happen if the banking sector does not recover?".

In essence the UK economy will not move ahead until the UK financial sector begins to recover and inject liquidity into the marketplace. Banks are a vital element of any economy both on a personal and a business level and without their assistance there is literally nowhere to go. The government, while able to support the sector in the short term, is not in a position to fund both personal and corporate banking services in the longer term. This shower of money which is pouring down on the sector has yet to have a serious impact and until the banks feel happy to lend again the UK economy will be in serious trouble.

Gordon Brown's immediate political future hangs in the balance and is dominated by the plight of the UK banking sector.

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