Wednesday, 18 March 2009

2m+ Unemployed & the IMF slam UK growth prospects

UK unemployment last month jumped at the fastest pace since records began
Not really all that surprising, what goes up inevitably must come down. And employment certainly is continuing that age-old trend. Unemployment will continue to rise for quite a while as time progresses and the recession deepens. That is the nature of the beast. 6.5pc is not all that high in comparison to France (7.9pc), the USA (7.6pc) or Germany (7.2pc) although we will catch up over the coming months.

Britain will take longer to recover from the recession than any other major economy, according to a leaked International Monetary Fund report.

Again this forecast does not surprise me, two of the main drivers of UK growth over the past decade have been in financial services and housing. Both of these sectors have so far bared the brunt of the downturn and will remain injured for some time. Where will growth come from for the recovery? I don’t know, but it is unlikely to come from the banks, seeing as the Government now has it’s grubby fingers clasped around them and will likely to be unwilling to release it’s grip soon, or from the housebuilders who are going to wait a while before the start new projects, as prices continue to head southwards.

The future doesn’t look too good at the moment, but we can be reassured by the fact that recessions do end, growth does pick up, unemployment falls and hopefully Brown & Darling are gone, before they can cause any more damage.

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