When Michele Greenman and her longtime boyfriend broke up, their heartache was compounded by the misery of Britain's sinking housing market.
Greenman, a legal secretary, and her banker boyfriend bought a house for the equivalent of about $730,000 early last year. But when they went to sell it a few months later, its value had fallen by $50,000.
They wanted to split up, but not to sell the house and absorb the financial loss. So for three months after their breakup, they lived together in an awkward and painful daily routine -- with him sleeping on the couch.
"It was awful," said Greenman, 29, who eventually moved out this year when he bought her share of the house.
Relentlessly grim news
As Britain endures its gloomiest economic times since the early 1990s, people across the country are making often-painful adjustments in the face of relentlessly grim economic news. House sales are at their lowest level in 30 years, new mortgage approvals are down 71 percent and bank repossessions of homes have nearly doubled over last year.
August new-car sales were the weakest since 1966. Britons are driving less and shopping more at discount grocery stores. According to the British Beer and Pub Association, pubs and bars are selling 1.6 million fewer pints of beer each day than a year ago.
Business bankruptcies in England and Wales are up 15 percent over last year, and the Federation of Small Businesses said 40 percent of its 215,000 members report they may have to lay off staff this year.
Much of Britain's problem has been imported from the United States through its subprime mortgage crisis. Steep rises in the price of oil and food haven't helped, either.
‘Proper gloom-and-doom recession country’
Both the European Commission and the 30-country Organization for Economic Cooperation and Development have concluded in recent days that Britain is headed for recession this year, or two consecutive quarters of economic contraction.
"It's proper gloom-and-doom recession country; people are in absolute shock," said Vanessa Feltz, a popular radio talk-show host on BBC London who spends three hours every day chatting with listeners on the air. "There is a very uneasy, troubled, nasty feeling, and I don't think it's going to get better anytime soon."
Chancellor of the Exchequer Alistair Darling, Britain's finance minister, caused a huge stir two weeks ago when he said that the country's economic conditions were "arguably the worst they've been in 60 years" and that the effects would be "more profound and long-lasting than people thought."
Darling's predictions were immediately slapped down by Prime Minister Gordon Brown, who is fighting to keep his job as his approval ratings dip as low as 14 percent amid growing dissatisfaction with the economy. Brown has repeatedly declared himself "cautiously optimistic" about the British economy.
Many economic analysts say Britain was in far worse shape during a recession in the early 1990s and the bleak economic times of high unemployment in the 1970s and early 1980s.
London is still home to one of the world's largest collections of the super-rich. But average Britons are increasingly sounding and acting like people feeling the pinch. "Gas is up, electric is up, rent is up, everything has gone up but our salaries," said Sue Johnston, 50, a Londoner who works in a bank.
Patrick Griffiths, 32, said his job as a corporate fundraiser has gotten much tougher. "There's a strange mood," Griffiths said. "People talk themselves into a recession. Companies spend less, people spend less, and it pushes us into a recession. There's a lot of fear and trepidation. . . . It's a weird atmosphere."
Griffiths said he's seen the price of beer, milk, bread and cheese steadily rise, but he's most worried about his mortgage. He said he and his wife are hoping to refinance their loan to lock in a fixed interest rate, but their options are fewer.
‘It's more than gloomy’
Miles Quest, a spokesman for the British Hospitality Association, said that fewer people are eating out and that more restaurants are offering two-for-one deals or a free glass of wine with dinner to lure them back. "People are more likely to choose a pizza or pasta dish over a steak dish," Quest said. "They may not order a bottle of wine, but instead a beer. There is some evidence people are trying to trade down."
"It's more than gloomy; a lot of people are fiercely affected," Peter Levene, chairman of Lloyd's, the London-based insurance giant, said in an interview. Levene said he believes that Britain's downturn is "very much an offshoot of the U.S. problems" and that the British economy will pick up after the U.S. economy does.
But in his view, Britons' "biggest worry is uncertainty. . . . There have been some glimmers of hope, but they don't last very long."
Things are getting so bad that many of the new economic migrants from Eastern Europe are packing up and leaving. The Institute for Public Policy Research in London has found that about half of the million or so migrants who arrived since 2004 have left, and that the exodus is picking up speed.
The institute's Laura Chappell said that as Britain's economy sags and Poland's booms, migrants increasingly see their jobs and opportunities at home. And she said a weakening British pound now buys just four Polish zlotys when it used to be worth seven.
The fact that the storied "Polish plumber" no longer wants to clear U.K. drains is adding to Britain's grumpiness. "You see it if you look at the tabloid press," Chappell said. "For the first time, instead of, 'Migrants are coming here and ruining things,' the headlines say, 'They are leaving just when we need them; they have no loyalty.' "
But for now, housing remains the primary concern in a nation obsessed with home ownership. "Our sense of well-being depends utterly on exchanging information at dinner parties about how much the value of our property has increased," said Feltz, the radio talk-show host. "It's a fetish here."
Housing prices have fallen an average of 10.5 percent in the last year, according to Nationwide, wiping nearly $40,000 off average house values. Standard and Poor's, the credit rating agency, predicts that housing prices will fall an additional 17 percent before leveling off in 2009.
About 45,000 families will lose their homes to repossession this year, according to Britain's Council of Mortgage Lenders. The council estimates that about 170,000 more families will fall at least three months behind on their mortgage payments this year. People getting new mortgages often must make much bigger down payments.
Desperate for an offer
Some are finding creative ways to beat the bust.
Last winter, Brian and Wendy Wilshaw put their five-bedroom house on 11.5 acres in the Devon countryside on the market for about $1.9 million. They had run the property, which includes a two-acre lake, as a fishing retreat for more than a decade but wanted to retire.
In the brutal housing market, they didn't get a single offer.
So they have now decided to sell their house in an online prize competition. For $45, people can buy a chance to win the house in a random drawing. So far, people have bought nearly 39,000 chances, closing in on the Wilshaws' goal of 46,000.
"All we want is what the house is worth," Wendy Wilshaw said.
Greenman, the legal secretary, said she's lucky that she and her ex-boyfriend found a solution. But, after working for years to buy her own home, the market is too volatile to think about buying again.
She has moved back in with her mother.
Special correspondent Karla Adam contributed to this report.