From Alistair to zero interest rates: the business year in review

A is for Alistair Darling: The chancellor was thrust into the spotlight as the financial crisis escalated this year. In the summer, just before a second wave of banking turmoil that rocked the markets, Darling gave an explosive interview to the Guardian saying that Britain faced "the worst economic times in 60 years". In November's pre-budget report he announced a package of tax cuts today (and tax rises tomorrow), that will send the national debt soaring Photograph: Leon Neal/Getty

B is for Bail-outs: In March, the investment bank Bear Stearns became the first US investment bank to face collapse – but in a last-ditch rescue it was bailed out by JP Morgan, with federal guarantees. JP Morgan also bought Washington Mutual after it was seized by the authorities in September – the largest US bank failure. Faced with this meltdown, government pumped billions of pounds, euros and dollars into their national banking sectors in a co-ordinated attempt to restore order Photograph: Lucas Jackson/Reuters

C is for Credit crunch and co-ordinated action Credit crunch became a part of everyday language this year as people felt the impact of restricted lending. All areas of the economy from the housing market to the high street suffered. The prospect of a collapse of the banking system was the final straw and October saw unprecedented co-ordinated action from central banks and governments as they slashed interest rates and launched rescue packages Photograph: Dominic Lipinski/PA

D is for Deflation: As Britain neared the end of 2008, fears of inflation turned to deflation as the weakening economy, lower commodity prices and the cut in VAT combined to limit price increases. This was a stark turnaround from just a few months earlier when the cost of living hit a 16-year high of 5.2% due to spiralling food and energy prices and utility bills, making the Bank of England more reluctant to cut interest rates despite signs that the economy was slowing sharply Photograph: Carl Court/PA

E is for Energy prices: Consumers saw the cost of heating and fuel rocket though much of 2008 as the soaring cost of oil pushed up retail prices. By the end of the year the tide was turning as the oil price slumped, but critics claimed that retailers were slow to pass on the full benefits Photograph: Christopher Furlong/Getty

Madoff appeared in court where a judge placed him under curfew. He was ordered to wear an electronic tag after failing to find anybody outside his family willing to sign surety for his $10m bail Photograph: Justin Lane/EPA

G is for Goldmans: Even Goldman Sachs, which largely avoided large credit-related losses while rivals went bust, plunged into the red. In December it posted its first loss since going public nine years ago due to a sharp fall in trading and investment banking revenues. The bank also made headlines when its energy team slashed its forecast for crude oil prices to just $45 a barrel next year – in a sharp U-turn from its prediction in the spring of $200 Photograph: Graham Turner/Guardian

H is for Housing market: Britain's once red-hot housing market came crashing down this year with steep double-digit price falls. Some areas of the country saw houses halve in value, helping to placing Britain among the worst performers as world house values collapsed. In an effort to kick-start the UK housing market, the Treasury announced a one-year rise in stamp duty exemption, for properties under £175,000, in September Photograph: Scott Barbour/Getty

I is for Iceland: After an era of cheap borrowing, Iceland's economy experienced unimaginable turbulence as the credit crunch bit. Its three largest banks were nationalised, inflation hovered in double-digit territory and the stockmarket closed down for several days while Russia and Britain negotiated loans and sent finance officials to reinstate financial stability. Interest rates were hiked to 18% to try and restore trust in the freefalling króna Photograph: IPA/Reuters

J is for Jaguar: Jaguar and Land Rover were sold to the Indian firm Tata for £1.15bn in March. But the year saw great struggles for the UK and global car industry, as sales plummeted and production was scaled back or halted. Manufacturers demanded government help, and the US carmakers General Motors and Chrysler were handed a lifeline from the government of $17.4bn in short-term loans. By December, Jaguar and Land Rover faced their own cash crisis Photograph: Paul Sancya/AP

K is for Kerviel: The scandals began in January when Jérôme Kerviel, a trader for the Paris-based bank Société Générale, was arrested. Dubbed the "French Nick Leeson", Kerviel was accused of losing his company £3.7bn. News of the alleged fraud, which virtually wiped out 2007 profits at France's second-largest bank, sent shockwaves through European markets, already battered by the escalating credit crisis Photograph: Martin Bureau/Getty

L is for Lehman Brothers: Wall Street was the scene of dramatic events in September when Lehman Brothers filed for bankruptcy after failing to find a buyer – the end of one of the oldest firms on Wall Street, with roots going back to 1850. Its core US investment banking business was then acquired by Barclays. In a momentous week, Merrill Lynch also agreed to be taken over by Bank of America for $50bn and the huge insurance group AIG was nationalised Photograph: Lucas Jackson/Reuters

Marks & Spencer chief Sir Stuart Rose called on the government to do all it could to restore consumer confidence as the high street giant unveiled dire Christmas trading, the closure of 27 stores and confirmed more than 1,200 staff were to be axed in a bid to cut costs Photograph: Newscast

N is for Nationalisation: The mortgage lender Northern Rock was finally nationalised early this year, followed by the buy-to-let specialist Bradford & Bingley in the autumn, raising fears of a domino effect in the British banking sector. Authorities elsewhere – from the US to Germany – resorted to similar measures to prevent the financial sector collapsing Photograph: Sara Lee/Guardian

O is for Oil prices: Crude oil prices surged in the early part of the year and hit a record high of more than $147 a barrel in July. They later fell back by more than two-thirds as demand waned in the wake of the deepening global economic downturn. Crude is now at its lowest level in four and a half years despite Opec's recent decision to slash production by record levels Photograph: Lucas Jackson/Reuters

P is for Profit warnings: Companies across all sectors issued scores of profit warnings this year, adding to panic on financial markets. In November, a profit warning from BT sent its shares to their lowest since the telecoms company was floated by the Thatcher government in 1984. In December alone, Sony, Toyota, Electrolux, HBOS, Kodak, RIM and Electronic Arts all cut their profits forecasts Photograph: Frank May/EPA

Q is for Qantas: BA boss Willie Walsh's grand plan to turn British Airways into a "truly global" airline took a large step backwards with the collapse of talks to merge with Australia's Qantas. He must now turn his attention to Iberia of Spain or be left behind. Recently, Delta Airlines has merged with Northwest in the US and Germany's Lufthansa is in talks to absorb Austrian Airlines and BMI Photograph: Mark Baker/AP

R is for Recession: Recession went from being a fear to a reality for much of the global economy. Germany, Europe's largest economy, became one of the first to fall into the slump, with the US and UK following behind. Japan, New Zealand and Singapore all suffered the effects of a recession. Even emerging economies such as China and India, who many thought could withstand the downturn with their rampant growth, showed signs of faltering Photograph: Sajjad Hussain/AFP

£393.60 for every man, woman and child in the UK Photograph: Ann Pickford/Rex Features

T is for Terminal 5: The chaotic opening of Heathrow's terminal 5 on 27 March was dubbed as a "national embarrassment" by the Commons transport select committee. More than 23,000 bags went missing and more than 500 flights were cancelled when the baggage system collapsed, despite a six-month training programme. Willie Walsh, BA's boss, apologised for the debacle – and admitted that the airline cut corners on its training Photograph: Peter Macdiarmid/Getty

U is for Unemployment: Unemployment in Britain shot over 1 million, with benefit claimants up by 75,700 in November alone, the largest rise since the early 1990s. The broader labour force survey measure rose to 1.9 million. Given the thousands of job cuts announced in the wake of the deepening financial crisis, unemployment is expected to top 2 million by Christmas and could rise to 3 million next year. Big rises in youth unemployment and long-term joblessness are particularly worrying Photograph: Chris Radburn/PA

V is for VAT cut: In December, many shoppers found that the price at the till was less than the one on the label. VAT was cut from 17.5% to 15% in November's pre-budget report in an attempt to kick-start consumer spending. It will cost the government £12.5bn in lost revenue, and came into effect so quickly that many retailers could not change their price tags in time Photograph: Matt Cardy/Getty

W is for Woolworths: Woolworths' 99-year history came to an ignominious end, with all 807 shops closing by early January. It fell into administration in November after last-ditch attempts to rescue the chain failed. Deloitte, administrators of the chain famous for its pick'n'mix, confirmed on 18 December that all Woolworths stores would close, with the loss of 28,275 jobs, after failing to secure a buyer for the business as a going concern Photograph: Christopher Thomond/Guardian

X is for XL Leisure: Tens of thousands of British holidaymakers were left stranded in September by the collapse of the UK's third-largest tour operator, XL Leisure. The Crawley-based group called in the administrators in the early hours of the morning after the failure of last-minute talks with its financial backers, the Icelandic investment group Straumur Photograph: MEN/MEN

Y is for Yahoo: It was a busy year for the internet search engine Yahoo: a controversial $800m advertising deal with the rival company Google collapsed; the co-founder Jerry Yang stepped down as chief executive, and 1,500 jobs were slashed Photograph: Don Ryan/AP

Z is for zero interest rates: Central banks around the world slashed interest rates in a desperate attempt to get people and businesses spending again. In the US and Japan, rates fell close to zero, and the Bank of England hinted that rates could fall to near zero in Britain too, having already fallen to 2%. In Japan, rates are already just 0.1% – re-awakening memories of the "lost decade" of the 1990s Photograph: Alessia Pierdomenicao/Reuters