In Britain, 2008 was the year when people went from cheering their Olympic team and its astonishing haul of 47 medals in Beijing to wondering how on earth the country was going to pay for the next Summer Games in London in 2012 in the face of a devastating global recession.

British Prime Minister Gordon Brown, summoning his inner Churchill. But can he weather the storm? (Associated Press)

In short, it was a year of towering highs and crashing lows.

I only arrived in London in June. But as a newcomer to the UK, even I can see that the public mood has changed.

In the time I've been here, the Olympics in China, a war in Georgia and a range of petty scandals and gruesome crimes have all competed for public attention.

But as the year cames to a close, it's safe to say people's minds are focused squarely on the economy. And no one's looking at that with much optimism.

Bad news bears

Britain has been pummelled by bleak economic news for months. The country's banks stood on the brink of insolvency and were only rescued by massive government intervention. The auto sector was next in line.

Then Woolworths, that bastion of the high street in so many British towns, went belly up.

It's a strange thing, though, this recession. On the one hand, Britons are being bombarded with messages about how everything is going down hill. Entire newspaper sections are devoted to stretching your meagre resources, with plenty of references to the hardships of rationing during the Second World War.

To read the papers, you'd think soup lines would soon be forming outside Buckingham Palace.

But on the streets, as 2008 limped to a close, it still felt like a gathering storm, like the full effect of this recession hasn't kicked in yet.

Still shopping

On Oxford Street, home to London's big department stores, shoppers were out in droves in the days before Christmas looking for bargains.

In the financial district, known simply as The City, there's little sign the infamous year-end parties put on by banks and financial firms have slowed down.

At one point, the London Ambulance Service had to set up a field hospital in a train station in the area to tend to office workers who had drunk themselves into oblivion at their company Christmas parties.

When I spent an evening with the paramedics there, they said they hadn't seen any evidence people had less money to spend on booze. Their theory, mind you, was that people were drinking to forget the year when the economic boom went bust.

An inner Winston

For someone used to covering politics for a living, I find one of the strangest things about the effect of the credit crunch here is how it seems to have helped resuscitate Prime Minister Gordon Brown.

When I arrived in the summer, Brown was a dead man walking. The Conservatives were miles ahead in the polls and Brown's Labour party looked ready to launch a coup to oust him as leader.

Then came the financial crisis and Brown seemed to summon his inner Winston Churchill.

He projected an aura of someone who knew how to get the country out of a bad situation. He pledged billions of pounds to prop up the economy and bullied European governments to do the same.

Suddenly, dull old Gordon was looking pretty sharp and the Conservatives watched their lead in the polls dwindle.

Tory Leader David Cameron did try to remind people that it was, you know, Labour that had been in power since 1997 and so should presumably take some of the blame for the tanking economy.

But, so far, Brown has been able to play the "steady hand on the tiller" card. Labour still trails the Conservatives but not by much. Labour supporters who not long ago wanted Brown's head on a platter are now whispering about an early election in the new year. Amazing.

Predictions

Looking deeper into 2009, mind you, the picture isn't exactly rosy.

Despite the government's stimulus package, the economy is still teetering. The pound has plummeted in value. House prices are way down. The stock market looks uncertain. And no one is really sure how bad things will get.

I'm not one for grand predictions. (My last one was that John McCain would beat Barack Obama.) But I do think things will get worse for the British economy, if only because I've not heard anyone say they'll get better anytime soon.

The soup-line scenario is unlikely but people are justifiably worried about their jobs.

I don't know if there will be an early election here, but I think no matter when the vote is held, the Conservatives have the edge.

I don't base that on any particular insight into the minds of British voters. I just think they might want a change after so many years with the same gang in power.

As for the Olympics, expect more paring down between now and 2012. The Games won't be ultra-flashy on a Beijing scale, but London will do fine.

Who knows, the credit crunch might even be over by then. And we'll be talking about some horrible new crisis just over the horizon.