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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

13 May 2009

Economy Update

The Bank of England has not made any changes to the bank base rate at the last two opportunities and there are both encouraging and discouraging economic signs in the news.
Whilst Sainsburys supermarkets have just reported above-expected profits, the job-less figures in the UK have risen to 2.2million. It is of course arguable that with large companies laying off staff, short-term profitability could be a direct result of lay-offs...
It is the job-less figure which causes concern, as having a large proportion of the workforce not working is a big drain on the economy as a whole - we must hope that the government will concentrate it's efforts on getting people back into work as quickly as possible.

In the meantime, the whole MP's expenses debacle threatens to undermine the UK political system in it's entirety. It's all very well everybody firmly agreeing that the system was wrong, but they didn't seem too bothered to correct they system until suddenly the electorate is in possession of the facts. Everyone is at pains to point out that expenses claimed were in line with the rules, and the rules were at fault - but if we step back and take a look at who came up with the rules, that would presumably be these same parliamentary politicians wouldn't it??

The phrase 'fiddling' while Rome burns has now taken on a slightly different nuance...

To get back to the economic forecast, it has to be said that we are very likely in for 12 months of job-losses and hardship before the economy (GDP) finds a new level. Following this plateau, we can expect a slow build-up in GDP and eventually a leveling of house prices. I would hesitate to say that the worst is over, because that can be very subjective. If you are about to lose your job next week, then the worst is hardly over for you personally.. However, it seems that the bulk of the major crashes that were going to happen have happened, notwithstanding there will no doubt still be significant job losses in the coming months.

Related posts:
25% house price drop expected

How long will the credit crunch last?

Economic meltdown
When will the property market recover?

2 comments:

Rachel said...

There are some people that seem to win whatever the economy is doing, it would be good to see what they are doing. Personally, I am saving money on my mortgage, buying cheap shares and my business is thriving. It is about time we started hearing some more positive things about the economy. It is worth remembering what is bad for some, is good for others. I know I am lucky, but if interest rates were high, shares were costly and the pound was more expensive, I would be much worse off.

jay said...

Bad news is what sells papers it seems..