(Guest post from David Beresford)
Media in the UK is obsessed with making the economic situation appear catastrophic. The figures don't look great, but unemployment of forecast two million at the end on the year is still very low and compared to Europe not a concern. Inflation is set to fall sharply and the Bank will be aggressively cutting rates over the coming months. Property prices have faced a significant correction, but are only retracing the excessive rises over the last few years. Things are really not that bad.
Well that is strictly not quite the case. The 'financial crisis', suitably more dramatic than a mere 'credit crunch', has pushed Robert Peston into a media celebrity. Just the very mention of his name makes me change channel. He is probably being lined up for the next reality celebrity show. Given his recent elevation in notoriety perhaps it should be 'Dancing on Icesave'?
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1 comment:
"unemployment of forecast two million at the end on the year is still very low and compared to Europe"
This seems a little of an exaggeration. 2mm unemployed, a number that is rising, represents an unemployment rate of 6.25%. That compares with an EU overall rate of 6.9% (which includes Spain at 11%). How is 6.25% 'very' low compared to Denmark's 2.9%, Austria's 3.4%, Sweden's 5.6% or Ireland's 5.9%. Granted it is lower than Germany's 7.3% or France's 7.8%, but it can hardly be described as 'very low'. The G7 rate as a whole is 5.8%.
As for 2mm being historically low - that is correct if your history is limited to the 1980s. In the 1970s unemployment was mostly 1mm to 1.5mm and only raised to 2mm in 1980.
Unemployment rising to 2mm is an indicator, once again, of impending recession. It is an indicator that Gordon Brown's claims of an end to 'boom and bust' was clearly wrong and foolish.
You may not be concerned my increasing unemployment but I think you're mistaken...
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