The real economy will soon be hit by the crisis

The Sunday Times reports that by 2010 2 million households will be in negative equity based on current trends. This is a further reminder of how the politics of the crisis are going to change once the real economy starts to be hit by it. As Matt puts it in his Sunday Telegraph column,

“it is much more likely time will be Gordon’s enemy. The disclosure that the state-owned Northern Rock is now twice as likely to repossess homes as other banks is deeply symbolic. In the Thatcher era, the state liberated voters by selling them their council houses. Now the state has turned into repo man. And as the PM glad-handed his international admirers in Brussels last week, Britain’s unemployment figures rose to an eight-year high – with worse to come. Paul Krugman, winner of the 2008 Nobel Prize for Economics, salutes the Prime Minister as the messiah of the global financial system.