The UK economy had been the envy of Europe for years but those high times seem to be an an end. One third of the British economy is related to banking/finance so problems in that sector along with even more personal debt than the US (shocking as that may be) spells serious trouble in the months to come. On that news, European markets are dropping hard in early trading, following negative days across Asia.

The British economy shrank more than expected and for the first time in 16 years in the third quarter of 2008, as fears grow the country could be in for a painful and prolonged recession.

The Office for National Statistics said on Friday gross domestic product fell 0.5 percent in the three months to September, the biggest drop since Q4 1990 and the first contraction since Q2 1992.

Analysts had forecast a fall of 0.2 percent.

On the year, GDP was 0.3 percent higher, the weakest rate of growth since Q2 1992.