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BUSINESS ENGLISH · BUSINESS ISSUES · UPPER-INTERMEDIATE (B2-C1)

THE
FINANCIAL
CRISIS
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1 Warm-up

How has your company been affected by the global economic crisis?

 The financial crisis that occurs can originate from a crisis Housing loans. Many financial
institutions that provide property loans that extend credit to people who are actually not
creditworthy financially, namely to people who do not have the economic capacity to fulfill
the credit they do. Bad credit in the property sector resulted in a domino effect that led to
the bankruptcy of several financial institutions.

2 Key words

Complete the sentences below:

bailout bargaining position downturn freefall

interest rates mortgage recession reluctant

1. The country’s economy is less successful. There is an economic downturn .

2. Business activity has declined for two consecutive quarters. We are officially in a recession .
3. Many firms are interested in hiring him so he can negotiate high salaries with potential employers. He is
in a strong bargaining position .
4. Most people take out a mortgage from the bank in order to buy their first home.
5. Housing prices are in freefall - apartments and houses are rapidly and steadily losing value.

6. The chairman is reluctant to hire new staff due to his company’s financial difficulties.

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BUSINESS ENGLISH · BUSINESS ISSUES · UPPER-INTERMEDIATE (B2-C1)

7. The central bank lowered its interest rates by 2% in order to stimulate the economy.
8. After asking for financial help from the government due to huge losses, the bank received a
bailout of $100 billion.

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UPPER-INTERMEDIATE (B2-C1) THE

FINANCIAL CRISIS

3 Find the information

Now read the article about how the global financial crisis was affecting the British economy in 2008
and find the information below:

1. The number of people who were forecasted to be out of work by 2009

 3 million
2. The inflation rate in September.
 5.3 per cent
3. The average pay raise.
 3.4 per cent
4. The number of approved first-time mortgages in August.
 15,600

5. The percentage below asking price of house prices in 2007.

 9 per cent
6. The amount of money spent by the British government to help the economic downturn.
 £50bn
7. The losses to Britain’s biggest pension schemes since the summer of 2007.
 £45bn

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UPPER-INTERMEDIATE (B2-C1)

THE FINANCIAL CRISIS

The Financial Crisis: Now the real problems begin

The economic downturn is really starting to bite in households up and down Britain.

Sunday, October 19th, 2008

1.
You’ve read about the worldwide economic crisis and its this year was virtually half that of a year ago. But some
complex elements. You’ve anxiously clicked on to estate agents are confident the market will have shown
websites for updates, and watched economic reports on signs of recovery by early next year. "We’re certainly at
the television screen. Now it’s going to start coming a lot the beginning of the end of the freefall in house prices,"
closer to home - maybe even your own. Here is how the said Chris Wood, National Association of Estate Agents.
different sectors of Britain’s economy are being affected. 6.
Shopping
2.
Jobs Latest figures from the British Retail Consortium (BRC)
Unemployment is at its highest level for nearly a decade, show sales falling more sharply than at any other time in
with a thousand people losing their jobs every day. By the past five months. The organization predicts retail
Christmas the number without jobs is expected to top conditions will remain tough until well into next year at
two million. David Kuo, financial expert at the money least. A BRC spokesman said: "Customers are short of
website Fool.co.uk, said: "Job losses are unavoidable spare cash and reluctant to spend what money they
because the economy is shrinking. By next year it is likely have got, and those conditions show no signs of
to reach three million, which will mean one in 12 people changing in the near future."
out of work." 7.
Savings and investments
3. Pay Falls in stocks and shares hit savings and investments
Despite last month’s inflation rate being the highest for hard. The market will remain volatile until Christmas, say
16 years at 5.3 percent, the average pay raise this year analysts, and is unlikely to start recovering until early
was 3.4 percent, the lowest for five years. Mick McAteer next year. "We are at a level now where people will be
of the Financial Inclusion Centre said: "Although able to make respectable gains over the long term,
inflation is higher than expected, it’s difficult to see although it will be painful in the short term," said Gavin
wages reflecting that. Employees in the private sector Aldon of the Share Centre. "In the immediate future we
will find it hard to be in a strong bargaining position will see a substantial fall in interest rates."
because of the expected rise in unemployment." 8.
Taxes
4. Mortgages As fewer people buy houses and unemployment
Only 15,600 first-time mortgages were approved in continues to rise, the Government will be getting less
August, down 55 percent from last year, according to money from taxes. And it will have to recoup the
the Council of Mortgage Lenders (CML). For those £50bn spent on the bailout from somewhere."
without a deposit of 10 percent or more it is nearly 9.
Pensions
impossible. Ray Boulger of John Charcol mortgage
Britain’s biggest pension schemes lost £45bn in value
brokers said: "People won’t be able to find a mortgage of
since the summer. Experts warn that recovery will not
more than 90 percent now, and as long as property
happen overnight. "There are two important things to
values keep falling that will stay the same."
5.
grasp about the impact on pensions," said Nigel Peaple
Homes
of the National Association of Pension Funds. "First, if
Houses are selling at an average of 9 percent below
you are already drawing your pension you will be
asking price, according to the Royal Institute of
Chartered Surveyors, and the volume of sales earlier unaffected by the market falls. Second, pension funds
are all about long-term investing."
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THE FINANCIAL CRISIS

4 Checking understanding

Explain how the following people in Britain are being affected by the crisis according to the article:

1. employees
 Employees’ pay rises are lower than normal, and it is not easy for them to negotiate better salaries

2. first-time home buyers

 It is nearly impossible to take out a mortgage with less than a 10% deposit.

3. home owners
 Homes are more difficult to sell, and are sold at an average of 9% below asking price.

4. Shoppers
 Shoppers are short of cash and reluctant to spend.

5. investors
 In the short term investors will not be able to profit their shares. In the long-run, however, they will be able to
earn decent returns.

5. the government
 The government will be getting less money from taxes and will need to finance the bailout.

6. Pensioners
 Pensioners already drawing their pensions will be unaffected by the crisis.

5 Find the words

Find a word or phrase in the article which means...

1. in a worried and nervous way (adverb, P1) anxiously

2. become higher than (verb, P2) top
3. a gradual, continuous increase in prices (noun, P3) inflation
4. the amount of money someone wants when they sell something, especially a building or a piece of land
(2-word noun, P5) asking price
5. likely to change suddenly or unexpectedly (adjective, P7) volatile
6. increases in money (plural noun, P7) gains
7. get back what you have spent or lost (verb, P8) recoup
8. understand something difficult (verb, P9) grasp

6 Future prediction and speculation

Various structures and verb forms are used in English to speculate about and predict the future. Look
at the following sentences and structures from the text and match them to the correct category
below.

1. By Christmas the number without jobs is expected to top two million.

2. By next year it is likely to reach three million
3. The organization predicts retail conditions will remain tough until well into next year at least.
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THE FINANCIAL CRISIS

4. The market will remain volatile until Christmas

5. But eventually these prices are going to go back up again. 6.as
long as property values keep falling, that will stay the same.

a. 1st conditional (if/unless/as long as etc. + present, will/could + infinitive)

b. prediction verb (e.g. warn, forecast, etc.) + (that) + subject + will/could + infinitive
c. be going to + infinitive
d. be + expected to + infinitive
e. be + likely/unlikely to + infinitive
f. will + infinitive

ANSWER
1. D
 By Christmas the number without jobs be expected to top two million. 2.
E
 By next year it be likely to reach three million. 3.
B
 The organization warn retail conditions will remain tough until well into next year at least. 4. F
 The market will remain volatile until Christmas 5.
C
 But eventually these prices be going to go back up again. 6. A
 as long as property values keep falling, that will stay the same.

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THE FINANCIAL CRISIS

Now match the following sentences from the text with the correct rule below:

1. the market will have shown signs of recovery by early next year.

2. As fewer people buy houses and unemployment continues to rise, the Government will be getting less
money from taxes.

a. We use the future continuous to say that something will be in progress at a time in the future.
b. We use the future perfect to say that something will be complete before a specific time in the future.

ANSWER

1. B

2. A

Complete the sentences below with a suitable word or structure from this exercise:

1. As long as housing prices continue to fall, it will become more difficult for us to sell
our property for the asking price.
2. Experts warn that next year will be a difficult year.
3. China is expected to continue its strong economic growth. It will have overtaken the USA
by 2017.

4. The country’s standard of living is expected to improve as its economy grows.

5. Next month, Andrew is going to start looking for a new job. However, because of his lack of
experience he is unlikely to be offered a very high salary.
6. "What do you think you will be doing in ten years’ time?" "Hopefully, I will be living
somewhere hot and sunny."
7. The construction of the new shopping and entertainment complex is expected to start by the end of
next year. It is going to create many new jobs.
8. Scientists predict that global warming will become a very serious problem in forty years’ time.
9. By this time next year, Jack will have completed his studies. He expected to achieve avery
impressive result.

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THE FINANCIAL CRISIS

7 Predicting the immediate future

Look at the following sentences. They all contain phrases for talking about things that are going to
happen very soon.

We are on the verge of an economic crisis. We

are close to finalizing the new deal.

The president is about to make a speech to the nation.

Scientists are on the brink of an important new discovery.

For each of the situations below, predict the immediate future using the phrases from this exercise.
Use a different phrase each time.

Example: Natalie has been under a lot of stress recently. She is likely to have a nervous breakdown very
soon.

Natalie is on the brink of a nervous breakdown.

1. The Yangtze river dolphin, one of the rarest mammals in the world, is going to become extinct very soon
due to overfishing.
 The Yangtze river dolphin is on the verge of extinction/becoming extinct

2. The political leaders are likely to agree very soon on a new economic strategy to deal with the current
crisis.
 The political leaders are close to agreeing on a new economic strategy to deal with the current crisis.

3. Scientists are likely to discover a cure for the disease in the very near future.
 Scientists are on the brink of discovering a cure for the disease

4. The negotiations were successful. We will soon sign a very profitable new contract.
 We are close to signing a very profitable new contract.

5. The financial preparations are finally over. We will become a public company very soon.
 We are on the verge of becoming a public company.

6. Are we going to have a global energy crisis very soon?

 Are we on the verge of a global energy crisis?

7. A new movie is going to be released in theaters very soon.

 A new film is about to be released in the cinema

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THE FINANCIAL CRISIS

8 Predicting certain future

Look again at the sentences in the box. Compare them to the sentences below and put the underlined
phrases in order of certainty.

By Christmas the number without jobs is expected to top two million. The

market is unlikely to start recovering until early next year.

By next year it is likely to reach three million.

Julia is very talented. She is bound to have a successful career.

The criminal was found guilty of robbing a bank. He is certain to go to prison.

It will definitely happen: 1. is certain to

It will definitely or almost definitely happen: 2. is bound to

It will very probably happen: 3. is expected to

It will probably happen: 4. is likely to

It will probably not happen: 5. is unlikely to

9 Speaking

In pairs, discuss the following:

1. three things you will be doing this time next year

 I will start investing
 I will study more diligently to get a high IPK
 I will learn public speaking skills
2. three things you will have done by 2030
 I will learn about stocks and buy stocks
 I will work diligently at my workplace later
 have a happy family

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8 Predicting certain future

3. one certain, one likely, and one unlikely future prediction about your country
 one sure prediction and one possibility that will happen is that the pandemic will end soon. one unlikely
is this country has no religion.
4. three things you think are going to happen very soon
 an increase in employee layoffs
 there is an increase in the number of unemployed
 the pandemic is over.

10 Talking point

Was your country affected by the crisis in a similar way to Britain in 2008? What kind of predictions
were made? Have they come true?
 Yes.
as many of its 240 million people live around the poverty line and 2.5 million new job
seekers enter the labor market each year, creating any economic downturn will have an
impact.
Meanwhile, economic observer Iman Sugema from INDEF, through his publication in
the Indonesian Journal of Agricultural Sciences in December 2012, also the statement
of the financial crisis not only destroyed the joints of the financial sector but also had
an impact on Indonesia's domestic real sector. In addition, it was found that the global
crisis was relatively stronger in impact on rural households and urban households.
However, as the rural labor market was more flexible, the impact of the crisis on the
rural unemployment rate was relatively weak.
Predictions:
Indonesia's economic growth, which in 2008 was 6.01%, fell to 4.63% in 2009.
Ten years later, in 2018, Indonesia is expected to grow at a rate of 5.17%

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