IT started as the subprime crisis, became a credit crunch and now looks likely to mushroom into a full-blown recession.
At least according to the European Commission, the Organisation for Economic Cooperation and Development and a host of highly-paid economist types.
While you won’t hear the dreaded "R word" being uttered by those in power here, the fear is that the UK economy having stalled in the second quarter will shrink in the third and fourth quarters.
That makes for a "technical" recession, with all that implies in terms of longer queues at the job centre and not so long queues at the check-out.
To most of us, it matters not a jot whether GDP growth has hit the buffers or actually gone into reverse.
Of more concern are soaring gas and electricity bills, higher petrol prices and the shock of paying £1.50 for a loaf of bread.
Those factors appear to be have triggered something of a seismic shift on the high street.
In the current challenging climate, it’s those retailers offering "value produ
ct lines" (that’s cheap goods in non-industry speak) who stand to win.
We’ve already seen sparkling numbers from the likes of discount grocer Lidl and clothing chain Primark.
On the flip side, retail giants such as Marks & Spencer and Next have had little to cheer about.
This morning has brought fresh evidence of the high street’s winners and losers.
Having attracted half a million more customers every week over the summer, supermarket operator Morrisons has every reason to count itself a winner.
The firm has relaunched cheaper lines and slashed prices on a range of everyday items to just 50p. As a result, like-for-like sales excluding fuel leapt an impressive 7.6 per cent in the 26 weeks to 3 August.
Underlying profits were up by almost a fifth in the first half
– matching City hopes.
Compare that with John Lewis’s half-time report card. There, department store sales fell 1 per cent in the six months to 26 July, with home goods tumbling 5 per cent as the property market continues to struggle.
Group pre-tax profits at the employee-owned company, viewed as a bellwether for Britain’s retail industry, slid 27 per cent.
Unsurprisingly, both businesses are taking a cautious stance with regards to 2009.
And next year could prove the acid test for the economy as a whole amid fears unemployment will top the two million mark and the housing market will struggle to recover.
Faced with such woes, it may be tempting to whip out the plastic and spend your way to happiness.
Don’t feel too guilty. The government looks poised to breach its own sustainable investment rule (the one that says borrowing must not exceed 40 per cent of GDP) as tax receipts dwindle.
One way or another, we all face one hell of a credit crunch hangover.
