Just this week a forecast from Ernst & Young’s ITEM club has suggested that the UK will ‘struggle to avoid a recession in 2009 with predicted GDP growth of 1.0%’. They have also suggested that in this period we can expect levels of unemployment to rise substantially.
Peter Spencer, Chief Economist to the Ernst & Young ITEM club said:
‘Both on the high street and in the housing market it is going to get a great deal worse before it gets better. We have already seen a housing crisis that has morphed from a credit crunch to a general collapse in confidence as prices have tumbled.’
This view has been supported by a Reuters poll of 70 Economists which suggested a 40% chance of us seeing a recession in the next 12 months.
On a more positive note, Wednesday saw London equities rise supported by lower oil prices and an improvement in the financial sector. The Banking sector saw a significant rise particularly for: Barclays (5.8%); Lloyds TSB (5%); Royal Bank of Scotland (3.6%) and HBOS (10%).
In the long term the outlook is promising, according to a new report from Goldman Sachs. The report predicts that Britain’s economy will grow and prosper over the next decade, coming in second place just behind the US in terms of GDP per head. This view has been supported in The Times who suggest that:
‘We need to remind ourselves that we emerged from the distress of past recessionary episodes to a brighter future in which Britons have never been more prosperous. We remain fortunate to live in an economy that, for all its notable and increasingly obvious shortcomings, is dynamic, flexible and possessed of immense potential.’
For those who are struggling with redundancies, rising food and petrol prices and mortgage difficulties these words are probably of little comfort at the moment. The one thing we can be sure of is that we’ll all be watching the markets anxiously over the coming months looking for a clearer idea of what’s ahead.
Tell us what you think…
We’d like to know how the economic downturn is affecting you – is it becoming increasingly difficult to find a new job? Let us know by taking our July survey and we’ll enter you into a draw to win a prize from Oxfam Unwrapped.
And if you’d like to talk to us in person – why not come along to our next Meetup in August. We’ll have more details about the event in our next email but you can sign up now if you want to get ahead of the crowd!
Otherwise you can always reach us on Facebook or at feedback@gaapweb.com. We look forward to hearing from you!
Best of luck in your job hunt!
The GAAPweb Team