As losses racked up in the financial sector, compounded by some rash mega-mergers and acquisitions, the British government had to bail out the banking sector as a whole in Oct 2008, much as was happening in the US and Europe. In total 400 billion GBP was committed. This included the injection of capital and underwriting of share issues, debt guarantees and short term loans. The biggest recipients of aid where RBS (Royal Bank of Scotland), HBOS (Halifax Bank of Scotland) and Lloyds TSB. The government later forced the merger of Lloyds TSB and HBOS into the Lloyds Group. Other more limited participants included Abbey, Barclays, HSBC, Standard Chartered and Nationwide.
GDP growth turned negative in Q2, with a technical recession starting in Q3. Chancellor Alastair Darling called it the worst economic scenario since the end of World War II.
As confidence in the British economy dropped, Sterling (or the British Pound, GBP) started to collapse, losing approximately 30 per cent against its main trading partners.