The recession is already biting, as though it was waiting for the
banks to come out of terminal crisis before making its move. In
addition we have seen that the German Car Industry is in deep trouble.
And as if that weren't quite enough tomorrow's Guardian says Gordon
Brown's banking bail-out risks unravelling with its main headline
"Brown bail-out under threat as bank seeks better deal " with a sub-
head 'Lloyds wants easier repayment'. h
e The Guardian
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===========================
DAILY MAIL 16.10.08
Unemployment to hit three million 'within a year' as it rises at
fastest rate for 17 years
By NICOLA BODEN
Unemployment could hit three million by the end of next year to
levels not seen since John Major was in power as Britain battles
recession, it was warned today.
The rate is already at its highest level for almost a decade after
soaring more than 10 per cent in the past three months to 1.79million.
In its biggest rise since 1991, 164,000 people lost their jobs in
June, July and August. Last month alone, more than 31,000 people
signed up to claim the dole.
Vicky Redwood from Capital Economics believes this is just the tip of
the iceberg and that unemployment could eventually hit three million
as the slowdown deepens.
'With the UK heading into recession, we expect this measure to rise
by a total of 1.5 million to around three million or nine percent by
the end of 2010,' she said.
She also estimated the number of people on unemployment benefit would
hit one million by the end of the year.
According to today's official figures, it already stands at 939,000
after an extra 31,800 people starting claiming the dole in the past
three months.
The unemployment rate rose 0.5 per cent over the quarter up to 5.7
per cent, its highest level since the spring of 2000.
Fellow experts are in no doubt there are even harsher times ahead.
'The worst is yet to come,' said John Philpott, chief economist at
the Chartered Institute of Personnel and Development.
'Our current expectation is that it will peak at something over
2.25m, which is about 500,000 up. But there is so much uncertainty
about the economy, it could be worse.'
Today's figures show employment levels across Britain have slumped,
down 122,000 in the past quarter to 29.4million - the biggest three-
monthly fall since 1993.
On top of the losses to date, it has emerged almost 10,000 public-
sector workers could be axed and frontline legal services slashed
because of Government cut backs.
The Ministry of Justice was already planning savings but has now been
told it must save £900million and is having to revise its shake-up,
according to reports.
Another 12,000 job losses have been announced by the Department for
Work and Pensions on top of 30,000 positions that were already due to
vanish.
In a further sign the economic slowdown is now hitting hard, more
than 40,000 manufacturing jobs were axed, taking worker levels to a
record low of 2.87million.
A total of 147,000 people were made redundant in the three months to
August, up 28,000 on the previous three months.
The number classed as economically inactive has also risen - up
16,000 to 7.89million. This is more than 20 per cent of the working
age population.
Meanwhile, the level of people out of work for more than a year
increased by 35,000 to hit 440,000.
Unemployment among young people, aged 18 to 24, also rose by 56,000
in the three months to 559,000.
The grim data was compounded by the announcement 800 manufacturing
jobs were being axed in Scotland by the U.S. computer chip firm
Freescale Semiconductor.
TUC General Secretary Brendan Barber said today: 'This is extremely
bad news, and these figures do not even show the effects of the bank
crash.
'After years when we could take reasonably full employment for
granted, we are now in for grim times. This is the next big challenge
for Government.'
David Kearn, economic advisor to the British Chambers of Commerce,
added: 'Unemployment is rising and employment is falling at their
fastest quarterly rates since the early 1990s. Unemployment will rise
above the two million mark earlier than we expected.'
Gordon Brown, speaking at the EU summit in Brussels, promised the
Government would do 'everything' to help create jobs and keep people
in work.
'Unemployment and redundancies are something we wish to avoid
wherever possible and we will do everything in our power to help
people to move in to jobs when vacancies exist, and to minimise the
impact of unemployment,' he said.
But the Tories work and pensions secretary, Chris Grayling, claimed
the figures were a 'clear indication of the real world consequences
of Gordon Brown's Age of Irresponsibility'.
'Again and again he claimed that he had ended boom and bust. That
looks pretty hollow now,' he claimed.
The Government has already pledged to pay an extra £100million to
retrain the thousands of workers axed as the economy continues to
slowdown.
The move is another indication ministers are preparing for a recession.
Work and Pensions Secretary James Purnell said: 'At a time like this
we need to do everything in our power to help people who lose their job.
'These are uncertain times and the clear message I want to send to
people is that there is help out there if the worst happens and they
find themselves unemployed.'
The Government said that the cash would be carefully targeted at -
among others - workers in sectors 'experiencing significant job losses'.
But Unions want a halt to cuts within the Government to stem the
rising tide of job losses.
The TUC has also called for the Green paper on welfare reform, which
includes plans to toughen the benefit regime, to be recalled.
Mr Barber said the policy was based on 'blaming the victim'. 'We have
got used to record levels of employment, but the world has changed
and we need new policies for jobless times,' he said.
'There can be no assumption that the people who are losing their jobs
will find it easy to get new ones, and they will need all the help
they can get with redundancy pay, retraining and personal advice.'
========================
REUTERS 15.10.08 5:16pm EDT = 11,16pm BST
Dow loses 733 after data feeds recession worry
By Kristina Cooke
NEW YORK (Reuters) - Wall Street had its worst day since the 1987
stock market crash on Wednesday, as bleak economic data fed worries
that all the efforts to unlock credit markets may not stave off a
severe recession.
Federal Reserve Chairman Ben Bernanke added to those concerns when he
said the economy faced a "significant threat" from paralyzed credit
markets.
Dismal monthly U.S. retail sales set the tone for the session,
dropping the most in more than three years, while a measure of New
York state manufacturing hit its lowest level since the index started
in 2001.
The Nasdaq has now wiped out all of its gains from Monday's 11
percent rally, while the benchmark S&P 500 is up only about 1 percent
from Friday's close.
Wednesday's data intensified recession fears, as did the Federal
Reserve's Beige Book report, which showed economic activity weakened
across the United States in September as businesses revised capital
investments and consumers curtailed spending.
Shares of companies considered economic bellwethers, such as
industrial conglomerate Caterpillar Inc, fell sharply. Caterpillar's
shares slid over 11 percent.
Fears of recession knocked commodities lower, with Exxon Mobil
tumbling 14 percent as the price of oil fell.
"Retail sales spooked investors this morning and has increased the
near-term risk of a broad-based recession," said Tom Sowanick, chief
investment officer at Clearbrook Financial LLC in Princeton, New Jersey.
The Dow and the benchmark S&P 500 suffered their worst one-day
percentage drops since 1987.
The Dow Jones industrial average slid 733.08 points, or 7.87 percent,
to 8,577.91, while the Standard & Poor's 500 Index tumbled 90.17
points, or 9.03 percent, to 907.84.
The Nasdaq Composite Index sank 150.68 points, or 8.47 percent, to
1,628.33.
The broad Dow Jones Wilshire 5000 closed down 905 points, or 8.99
percent, at 9,160.43, representing a paper loss for the day of
approximately $1.1 trillion.
Thursday, 16 October 2008
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