The current financial crisis will prolong the UK’s economic slowdown, which may now last into 2010, an economics consultancy has warned.
According to a report from the Centre for Economics and Business Research (CEBR), the UK economy now looks set for 15 months of recession or stagnation, followed by a slow recovery.
CEBR has also slashed its UK growth forecast for 2009 to 0.3 per cent, the lowest since 1992, and cut its prediction for 2008 to one per cent.
Charles Davis, one of the report’s authors and economist at CEBR, said: “We expect the UK economy to suffer a technical recession in the second half of 2008 - with output falling by 0.2 per cent in each of the third and fourth quarters.
“The economy will then hover at these lower levels for a further six months. So it will be the autumn of 2009 before the economy will recover to the same levels of activity seen at its peak in the second quarter of 2008.”
However, the situation could get worse if the government and the Bank of England do not step in to ease the current crisis, the report’s authors warned.
Mark Pragnell, managing director at CEBR, added: “A year ago, we thought wholesale financial markets would sort themselves out in six-to-nine months. We have been proved wrong and, now, the chances of a City-inspired recovery are looking slimmer than ever.
“Urgent action is needed by the Treasury and Bank of England to rehabilitate inter-bank lending and, especially, the markets in mortgage-backed securities.”
The economists predict average earnings are expected to increase by just three per cent in 2009 but inflationary pressures are set to ease, falling back to the target level of two per cent by August 2009.
43 Comments
To all those who complain that Christmas is becoming too commercial are certainly going to get their wish this time round. No bad thing maybe.
“The economists predict average earnings are expected to increase by just three per cent in 2009 but inflationary pressures are set to ease, falling back to the target level of two per cent by August 2009″
That is unless you work for the local councils who will go on strike to ensure they get over 8% payrises while the rest of us suffer in silence
So, the end of this trauma will come at the end of this “dead” government, thank goodness. What an unholy mess they will hand over to the next lot gaining power, borrowings of £90 - 100 Billion, plus what we as taxpayers have paid for Northern Rock and Bradford and Bingley.
The after affects of the past eleven years are going to live with us for many years to come and if anyone is hoping for the long awaited tax cuts after Brown has taxed us to the hilt, then you will have a long time to wait. No Government can pay off a £100 Billion debt and give tax cuts at the same time. We now know where all the finance for the NHS, Education and the Police came from, we lived on tick and now the bailiffs are coming to call, all thanks to Bliar, Brown and Darling and crew.
i always thought an effecient nhs etc was preferable to tory handouts and cuts
sorry but what happening around the world is are own doing… we all had a hand in the value of are home going up. yes the bank will lead you the money even if you can’t pay it back as the house value we cover it….we we’re all smiling as we we’re make money on are homes. its called GREAD but now its the Government fault. no i don’t like mr brown but the world is not run by him.and its happening all around. don’t tell me you didn’t see this would happen 2 years ago…
when we get in we will hammer public spending and slash taxes for big businesses that will help to sort this mess out, never forget tony blair did this with his love of nhs spending and unwinnable wars
devon salopian said: Sep 29th, 2008 at 4:40 pm i always thought an effecient nhs etc was preferable to tory handouts and cuts
Are you being serious? An effecient nhs? Devon not even your love for Gordon Clown can think that!
yes tory boy we are all looking forward to closure of schools, hospitals, and mental patients put out on the streets just like maggie did. 2 year waiting lists for nhs treatment etc thanks for reminding us about tory cuts. it not WHEN you get in hopefully it is a very distant IF
dave i can only assume you have been lucky enough not to have had nhs treatment. when you have welcome to the debate
I always go private - The state of the NHS and NHS hospitals today is appaling. If you go in for treatment your likely to leave with MRSA even worse than whatever you went in for.
private all the way for me.
When the Government STOPS funding pointless managers and admin people in the NHS and startin paying and recruiting more nurses I may return to the NHS until then going private is the only way with the shambles labour have made of the NHS.
You go private and you might get MRSA, i have had to use the NHS many times and they have been really good, try going over to the usa, my inlaws had to check their insurance before gettin treatment for their childs broken arm and then they were sent away because he wasn’t fully covered.
I have been lucky enough not to need it correct. Family members have not been so lucky, it took my mum 8 months to her temp hip fitted, another 6 months to get the permanent one done, have you had to be house bound for 14 months devon? thought not, when you have come back to me and tell me the nhs is good. I await further comments mentioning “diddy” “spivs” and “gentle socialism”
Y Mab - since when did council workers or public servants ever get an 8% pay rise?
At present they’re pretty much restricted to 2%, and even historically their pay rises have been at the 3-4% level when average private sector rises have been much higher.
Note to neil-aus:
One of the authors of the GREEN NEW DEAL, Ann Pettifor, wrote a book 2 years ago talking about the importance of reining in and regulating the crazily liberalised financial sector.
Her book, published in 2006, is called ‘The Coming First World Debt Crisis’.
I recommend it.
Y Mab Darogan said:
“That is unless you work for the local councils who will go on strike to ensure they get over 8% payrises while the rest of us suffer in silence”
Exactly which local council workers are you on about Y Mab? Many council workers are very poorly paid and have had pay rises below the rate of inflation for years. Where do you get your “over 8%” from - or did you just make it up?
I accept that senior staff are ridiculously highly paid, but the same can be said across the rest of the public and private sectors.
dave, advanced osteoporosis is no joke especially when caring for a 94 year old mother. i agree the nhs is not perfect but it is a lot better than it was in the mid 1990’s
We will never recover from the abysmal new labour project. Sold our country down the river.
Maggie and her Tory gang wrecked our Industries years before Labour got into power! and all they have Managed to do is add to the misery with the PC Brigade in tow! I have no faith in our Politicians! Cameron is just another silver spooner trying too hard to look good!
Y Mab, why are you ’suffering in silence’ about not getting a pay rise? Are you too scared to ask the big boss for some more?
thanks huw . i’ve been reading about 1930 depresstion and it adding up the same way. and 15 months to get better sound a joke try 5-10 years.i’m not joking when i say i’ve sold my house and now rent.
bring back maggie, the mother of our nation
Well I have decided to take politics seriously bearing in mind that I am on a budget in the worst recession that many people can remember.
So I did my research and found out that to join the Tories its £25, Labour £15 and Liberal were £15 aswell.
I was shocked that the BNP was £30 although its half price for the unemployed and black people.
But then I found the Greens at £10. I was just about to make the payment when I discovered a party that was even cheaper and has fielded more candidates that the Greens - that’s right at £9.99 you can join the Monster Raving Looney Party.
So if you’re like me, looking for political affiliation but have been hit by the credit crunch, then join the Looneys – for an extra £10 you get a t-shirt.
So join today – you know it makes sense.
maggie has twisted more melons in 11 years ,steel workers, miners, poll tax, nhs, the mentally ill, the homeless, schools, er need i mention any more twisted melons
as for mother of the nation, we must have been drowned at birth, a revolting woman
Capt Chaos, no, Maggie didn’t wreck our industries, she rightly wrecked the Unions that wrecked out Industries and under this lot they are on the way back again. Strikes once more are taking off, we have wage freezes/restraint and all the making of industrial conflict/strife that we should expect from New Labour.
Just in case many who beat the drum for New Labour, don’t know it. Our National Debt is in the order of £700 billion and rising dramatically, our budget deficit is about £65 billion and set to reach £100 billion by the years end. Manufacturing output is in recession (ie nil growth) with the worst figures since these records began. Then some have the gall to defend this New Labour government. Why are these figures like this, simple, Labour have lived on borrowing money it did not have. They have taxed us to the hilt, they have poured money into the public services and inflation (I mean “real” not the governments figures) is in double figures. And yet, for all the money expended on the public services, the people to lose out are the Public Sector workers themselves. I am not talking about the fat- cat Departmental Directors and Deputies and all the other jobsworths who coin it in with massive salaries, I am talking about the clerks and admin and blue collar workers on Councils and so on who are on pittance salaries and who have been made the sacraficial lambs for the failed New Labour dream presided over by Masters Brown and Darling.
Just as the day of reckoning has come with the countries finances and economy, the day of reckoning is coming to Brown and the rest of the gang that has governed us with lies, deceit and smoke and mirrors and what a legacy they will hand over, the country will verge on Bankruptcy if they continue as they are.
twisting my melon said:
“bring back maggie, the mother of our nation”
Probably explains that funny walk of hers!
twisting my melon there no point bringing Maggie back she destroyed all our Industries years ago nothing left to cut!!
twisting my melon might find Ann Pettifor’s ‘The Coming First World Debt Crisis’ interesting, too.
Ann Pettifor criticises Mrs Thatcher and the policy which she and Ronald Reagan pushed in the early 1980s: the lifting of controls on capital flows between countries.
This policy led the richest members of society in poor countries to export their capital to banks in rich countries with terrible consequences for the poorest people in those countries.
If people on this thread do not like the way that their lives are at the mercy of the international financial sector, then they might want to reflect on which politicians paved the way for those sectors to be so unregulated in the bad decisions that they took.
Mrs Thatcher fought against regulation of the financial sector.
Surely more regulation, not less, is what is needed.
Would it not be more accurate to say that she was the ‘mother of the meltdown’, twisting my melon?
Huw: What was stopping Blair and Brown regulating the Financial Industry? They had such a majority they could have done what ever they liked. They could have even used the Parliment Act unlawfully if it was such a real concern. lets face it, they undemocratically passed the Hunting Act for the sake of a few mange-ridden foxes, why not use their dictorial powers to take responsibility and prevent the financial bother we are in now?
Lucy W wonders how regulating the financial sector could possibly be ’such a real concern’.
Her lack of concern about regulation is astonishing, when one considers the millions of ordinary people, who are currently trying to take their savings out of foolish and under-regulated banks.
Blair and Brown have continued the liberalising trend started by Thatcher and Reagan.
They have not regulated them either and they could have.
That is why I am a member of the Green Party, which wants proper regulation of the international financial sector, as set out in the GREEN NEW DEAL.
http://www.shropshirestar.com/2008/07/21/experts-call-for-credit-and-climate-crunch-action/
And that is why I am NOT a member of the New Labour Party.
I hope that answers your question, Lucy W.
Huw: I have visited the Green website and I cant see that they have previously campaigned for toughter Finanicail regulation.
Surely they are bolting the stable door after the horse has shut it?
Regulation of international finance:
The Greens campaigned to introduce a so-called TOBIN TAX on speculative currency exchanges in the 2005 election.
This would have raised extra funds for Britain’s overseas aid budget.
Regulation of international trade:
Greens also campaigned against the policies of the World Trade Organisation (WTO).
At present the WTO does not allow states that trade to discriminate in favour of local production or to seek preference for sources that respect human rights, treat workers fairly or protect the environment.
In other words the WTO does not allow governments to regulate international trade in any way which will help workers or protect the environment.
I hope these two examples rapidly plucked from the 2005 manifesto answer your questions, Lucy.
NB also the date when our Green New Deal came out: (21st July 2008), BEFORE the horse had bolted.
One of the authors of the GREEN NEW DEAL, Ann Pettifor, released her excellent analysis of the situation, The Coming First World Crisis, in 2006.
Huw: You really dont have a clue about international finance. You may have gleaned that I worked in the city for a while and dealt with forward exchange currency contracts - all these contracts are speculative so your DOBIN tax would be a tax on all UK importers/exporters. Is that what thos country needs?
How much money has Ann Pettifor recieved from the Green Party for her services? And what is her income from her book writing?
Is your bicycle ethically made?
So, ‘Lucy W.’ when did you leave the city to work as a caravan-dwelling car mechanic and chief generator of misleading propaganda on the Shropshire Star site?
Huw: Well even though you dont answer my questions, I have no problem answering yours - I have nothing to be embarassed about.
I was a test driver at the end of the eighties. Worked in the city early nineties. Had my own Financial Services Mortgage Company late nineties regulated by the OFT. Spend some time in various industrial organisations while becoming a qualified lawyer and reverted back to automotive technology freelance.
A varied CV that gives me a broad understanding of matters.
How does your CV read? Let me guess, education, education, education. Am I right?
‘Lucy W’, I thought a ‘lawyer’ like you ought to spot that it was ‘Tobin’ not ‘DOBIN’.
The Tobin Tax was created by the economist James Tobin, who was concerned about international financial stability after President Nixon decided to move away from the gold standard in the 1970s.
The Green Party supported it in our 2005 manifesto because we see short-term speculation in currencies as harmful to international financial stability.
With wider understanding of the international financial system provided by education, education, education the Green Party also felt this would be popular with ordinary hard-working people.
You asked how much money Ann Pettifor gets from the Green Party.
I have no idea.
Ann Pettifor works for Advocacy International, which campaigns for justice in international relations between low and high income countries and for a liveable future for our planet.
Ann Pettifor helped design and lead the international campaign, Jubilee 2000, in the 1990s, which successfully persuaded a large swathe of world public opinion, as well as world leaders, to cancel $100bn of debt owed by 42 countries.
Jubilee 2000 was the template for the Make Poverty History campaign of 2005.
Why don’t you get on to Ann Pettifor’s website or her blog site (’Debtonation’), where you can hear her interview on Radio 4’s World Tonight programme of the 14th October.
You could ask her your question directly.
Huw: DOBIN was a deliberate pun, but now you have made it even funnier!!!
So I am right, my powers of intuition still with me, you went to school, Uni and became a teacher. Its so obvious to me as all you ever do is disseminate other peoples opinions with out applying any analitical skills of your own.
You can’t answer any direct questions and you reduce the tone to abuse when you cant advocate your position.
You dont believe anything is true unless you can read it on the internet in Wikipedia.
It is the education system thats so wrong with teachers like you.
My greatest influencer were some of my teachers, particularly maths, history and my paino teacher. They taught me to use my own resorcefulness to overcome a problem, even though my solution may not be the conventional one. And when I find myself struggling with a matter and can often feel their “presence” still, encouraging me to think freely and suceed.
Well I know you think I am the big bad wolf, but its better than being another sheep in the fold.
‘Lucy W’, do you think your history teacher is proud of your ‘resourcefulness’ when you insult homeless people as ‘ungrateful scroungers’ ( http://www.shropshirestar.com/2008/10/07/shock-figures-on-area-housing-crisis/ #13 )?
Do you feel your piano teacher’s ‘presence’ encouraging you to think freely when you callously tell me that cyclist fatalities are Darwin’s natural selection in action ( http://www.shropshirestar.com/2008/06/19/town-gets-cycling-boost/ #86 )?
What do you think your maths teacher feels when you falsely state that global warming isn’t happening because some glaciers are growing? ( http://www.shropshirestar.com/2008/10/02/cameron-steps-up-to-the-mark/ #8 )
Did your maths teacher teach you to quote statistics OUT OF CONTEXT in order to mislead?
According to the WORLD GLACIER MONITORING SERVICE report released on September 1st 2008, most glaciers are in decline.
Huw: zzzzzzzzzzzzzzzz
Here we go again, raking up the past. Well I can do that. Remember when you said I was lieing about my eco-credentials but you declined to tell me what you disbelieved and refused to accept proof?
If you want to go backwards, they by all means - please tell me what you dont beoieve about my eco-credentials and give me your email so I can send you proof.
As for all these organisations you quote - how do we know they are telling the truth?
The fact is, I have visited the Frans Joseph Glacier twice and it is definately advancing. I can’t comment on the others as I haven’t see them - but for some reason you fell that you can speak with authority about them.
So which glacier(s) have you personally visited so that you can be sure they are retreating?
‘Lucy W’, it’s not just your eco-credentials that I don’t believe. I fundamentally disagree with your entire political philosophy.
It is not remotely ecological to argue that -in order to have an opinion on worldwide glacier retreat- you have to fly all over the world, pumping thousands more tonnes of carbon dioxide into the atmosphere, to ‘personally visit’ those glaciers.
People, who make claims about their ‘eco-credentials’ would not make the mistake of putting those claims next to claims about flying to New Zealand.
‘Lucy W’(#39): ‘I can’t comment on the others as I haven’t see them - but for some reason you fell that you can speak with authority about them.’
The reason I feel that I can speak with authority about glaciers is because I trust and believe the World Glacier Monitoring Service.
In a joint statement on 16 March 2008 (see the BBC website), the World Glacier Monitoring Service and UNEP (United Nations Environment Programme) said, ‘Average glacial shrinkage has risen from 30 centimetres per year between 1980 and 1999, to 1.5 metres in 2006.’
Your claim about glaciers is misinformation of the most irresponsible kind.
Just like your false claim (#30) that the Green Party has never called for regulation of international finance.
Huw: Well as many people know, I have an extremely low carbon foot print so flying around the world isn’t really an issue in the scheme of things.
So will you tell me what you dont believe and allow me to email you some evidence?
So can I assume that the Glacier people are saying that Frans Joseph is retreating or is this an “inconvient truth” they have ignored, just as you wish to ignore any evidence about my eco-credentials.
How do they explain that Frans Joseph is advancing?
Have you seen the list of glaciers they use for their “statistic”? Is frans Joseph in it?
And that was 2006, the tide has turned and we are heading for an ice-age, thats why glaciers are now advancing. That research is such old hat.
So I can assume that you are not really interested enough to look for yourself.
Fact remains FJG is advancing and you refuse to accept that.
They say Ignorance is bliss, but in your case its seems to be causing you a great deal of distress.
Re #30. I never claimed that Green had not previously campaigned for financial regulation, I merely said, that after your advice to visit the web-site, I could not see from the site a previous campaign.
So have you ever visited a glacier?
This millenium, I’ve visited Frans Joseph twice(NZ). Been on the glaciers in British Columbia and looked down on the Glossenglocker glacier when climbing the Glossenglocker itself (Austria) not far from Hiltler’s “Eagles Nest” - well worth visit as well if you are into Nazi memorabilia.
If the OVERALL picture is one of glaciers retreating at an astonishingly fast rate, and if the VAST MAJORITY of the world’s scientists believe that mankind is warming up the planet with our carbon emissions, then citing one glacier advancing is grossly irresponsible.
You’ve deliberately and wilfully missed the elephant in the room.
And readers would be justified, judging by your other contributions, in thinking that your wilful blindness is utterly cynical.