CBI predicts UK recession will continue in 2009
The CBI has revised its economic forecast in light of October’s financial turmoil.
The Confederation of British Industry (CBI) has predicted that the UK recession will “last longer and be tougher” than first anticipated, with 2.9 million people expected to be unemployed and inflation predicted to fall from 4.2% to just 1.2% in 2010.
The recession, which began in the third quarter of 2008, is expected to produce rates cuts and is likely to bring the bank rate to as low as 1.5%. The CBI also predicts that the economy will contract by 1.7%, and will shrink even further until it gradually begins to recover during 2010.
John Cridland, CBI’s Deputy Director-General, said that it was impossible to look into the future with certainty: “Given the speed and force at which the downturn has hit the economy, we have reassessed and downgraded our expectations for UK economic growth. What is clear is that the short and shallow recession we had hoped for a matter of months ago is now likely to be deeper and longer lasting.
“An unwelcome consequence of the downturn will be a significant loss of jobs, many of them in sectors that have been relatively insulated until now.”
According to the organisation, the effect of the recession on the public will be considerable. Public borrowing is set to increase dramatically, reaching a high of £93.8 billion – 6.4% of the UK’s GDP. Conversely, household spending is likely to slow down, with household consumption figures contracting by 1.8% in 2009.
For more information about the CBI, click here.
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Recession to Depression
All statistics and past and present information indicate that the recession has a long way to go. A whole decade or two. From recession to depression…it can happen…why…
- Borrowing money now to fix the current state of economy…
- This huge debt burden will be passed down to a future generation who are yet to finish the primary school…
- The next major factor that can push us further into a depression is our position as a property/mortgage-led economy and its consequences for the nation…
- The other major factor intertwined with the above two factors I already mentioned is in the job creation areas. We need more private sector jobs to be created then public sector jobs and theses jobs need replace many of the jobs that we have lost and may never get those types of jobs again…
The future does look bleak unless we have radical re-thinking about education, job creation and attracting business to the UK… In my opinion the recession (depression) will last 8–12 years with unemployment reaching 6–7 million around 2012-2014…
For my opinion on the solutions on the above scenarios and a way out of this cataclysmic mess please watch this space and more writings from the ‘Economist Dude’.
September 23rd, 2009 at 3:22 pmOne quater of economic growth and the fat lady sings, the recession will be over.
That is the technical end to the recession anyhow.
The reality is, we in the uk will have untold years of financial hardship while we repay the 150 billion quid that gordon brown has pulled out of a hat.
The sale of public assets will only scratch the surface of that debt and a post office strike could null it out.
We are in it up to the neck.
October 18th, 2009 at 11:10 amYear three into the Great Financial Crisis of our time, we have had the first official bailout of an entire country, Greece and more countries lining up for bailouts in Europe, known as the PIIGS and more countries like UK, France are in the same boat. big financial institutions in Europe and USA such as Lehman Brothers, Bear Sterns, Icelandic banks, Northern Rock, RBS ,These bailouts (rescuing too big to fail entities) and defaults that are occurring in European countries and US cities are simply early WARNING signals what may end up being the largest financial bubble ever to burst. A bubble that today amounts to more than $650 trillion DERIVATIVES market.
Increases in interest rate will trigger the biggest ever crash in our history, and make the above past debacles look like a walk in the park.
As interest rates begin to rise worldwide, losses in derivatives may end up bankrupting a wide range of countries, institutions including cities, states and other governmental and quasi-governmental entities, major insurance companies, top investment houses, commercial banks and universities etc depending on which side of the trade (bet) the fall
August 21st, 2010 at 10:52 am