‘Tens of Thousands to be Laid Off Every Week’ as UK Falls Into Recession
September 11th, 2008A “horrible surprise” could be just around the corner?
WTF? Is Cheney visiting the UK?
Via: IHT:
Tens of thousands of people could be laid off every week in the run-up to Christmas as the UK economy falls into recession, David Blanchflower of the Bank of England’s monetary policy committee warned today.
Blanchflower told MPs to expect “a large increase in unemployment”, and warned that a “horrible surprise” could be just around the corner. The gloomy assessment sent shares in London falling, and also weakened sterling yet further against the dollar.
Blanchflower, who has repeatedly tried and failed in recent months to persuade the MPC to cut interest rates, predicted that the unemployment count will rise by 60,000 a month for several months in a row, probably starting in October.
“I believe we will see a deeper economic decline than other people think,” Blanchflower told the Treasury select committee, ruling out the possibility that the UK GDP will not shrink.
He added that the employment market will come under extra pressure this autumn when school leavers look to join the workforce.
The claimant count has already risen for the last six months. In July it increased by 20,100, the fastest rate since the early 1990s.
Those who hold onto their jobs through the downturn should also brace themselves for difficult times, Blanchflower warned. “Employees in the private sector are not in a position to ask for higher wages, and employers are not in a position to pay it either.”
If you ever read the comments at the end of stories on the UK economy at British news sites, they are always upbeat. I have noticed for years that the British are deluded about their own true economic state, more so I think than Americans. I think they have bought the lie – and internalized it – that the wonderful “Free Market Economy” will ensure perpetual prosperity far more so than people in the U.S. have (who at least have something of a populist streak, that questions the endless Wall Street propaganda). In fact, I don’t recall ever reading harsh criticism of their financial establishment by any Briton. So yes, when Great Depression 2 comes, I suspect it will be even more of a shock for the British than it will be for Americans.