This has added to the severity of the downturn because: •  it has undermined the confidence of the community; and  •  it has led to a sharp slowdown in the availability of credit. This cycle is also highly synchronised, with every significant country in the world affected.
Household and business confidence collapsed simultaneously in every country late last year, as we all reacted in the same way to the dramatic news being transmitted around the world. The events of the past six months have resulted in big changes in the forecasts for the global economy.