Here are the two reports scheduled for today. They are grim but not unexpected but you’ll note that nobody seems to show the slightest interest in this government in “where next?” or how to we repair the damage still being done. I’ll deal with that separately
Christina
TELEGRAPH 12.8.09
1. Bank of England: recession was deeper than feared and recovery will be slow
The Bank of England warned today that Britain's recession was deeper than feared and a recovery is likely to be slow and protracted.
In its widely watched Inflation Report, the Bank's Monetary Policy Committee said that the recession 'appeared deeper than previously estimated'
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While Mervyn King, the Bank's Governor, acknowledged that there have been more encouraging signs from recent surveys, "we will still, I think, find ourselves in a difficult position for a long time to come."
Inflation: to stay below the Bank's 2pc target and there remain real downside risks
Recovery: strength of it 'remains highly uncertain' [On radio I heard that GDP might well fall by as much as 6% this year. Darling’s last forecast - widely derided - was -3.5% -cs]
Unemployment: it will rise for the 'foreeeable future'
The Bank's cautious note comes as figures from the Office for National Statistics showed that unemployment is still rising, with 222,000 jobs lost in the three months to the end of June.
The quarterly report will be even more carefully scrutinised than usual given the Bank's shock decision last week to extend its programme of printing money, or quantitative easing (QE). The Bank sent sterling sliding with its plan to inject money into the economy by a further £50bn to £175bn.
The pound, which has been under pressure since that announcement, shrugged off today's news to trade at $1.6452. British government bonds, or gilts, jumped in price as markets digested the signal from the MPC that interest rates will be kept at a record low of 0.5pc for months.
The unprecedented programme of QE has been criticised by some for storing up future inflation, but new forecasts from the Bank suggest it does not believe inflation poses any imminent threat. Mr King said that the Bank's preferred measure of inflation, which it uses to set the level of interest rates, could slow below 1pc this year.
"Governor Mervyn King has sounded pretty downbeat about the prospects for bank lending and the need for balance sheet adjustments more generally," said Vicky Redwood, an economist at Capital Economics. "Overall, then, monetary policy looks set to remain extremely loose for some time yet."
Since the MPC's last report in May, the sharp falls in house prices have eased and consumer spending has proved surprisingly resilient. Mr King acknowledged that "it is likely that output stabilised in the middle of this year, and business surveys and other short-run indicators suggest that growth is more likely than not to resume over the next few quarters."
However, with companies still laying off staff in the teeth of the global downturn and the banks writing down billions in bad loans, Mr King emphasised that recovery will be difficult.
After a slow reaction to the credit crunch in the months that followed the collapse of Northern Rock, the Bank has been at the forefront as central bankers take unprecedented measures to fight the global recession.
2. Unemployment at highest level since 1995
Unemployment has risen once again to reach 2.43 million, the highest level since 1995, figures from the Office for National Statistics showed.
Despite recent signs that the recession may have passed its worst phase, the jobless rate traditionally lags behind.
The three months to May saw unemployment rise by 281,000 to 2.38 million and the latest figures released on Wednesday show another 220,000 jobs were lost in the three months to June.
UK unemployment is now at its highest level since the summer of 1995.
The data from the ONS showed that the number of people claiming jobseeker's allowance increased by 24,900 in July to 1.58 million - its worst level for more than 12 years.
This marks the 17th month in a row where the "claimant count" has increased in the UK.
Many experts predict dole queues will stretch past the three million mark next year - but an even gloomier forecast from the Centre for Economics and Business Research says it could approach four million.
This would be far worse than the 1980s peak under Margaret Thatcher.
The situation is set to grow even more bleak in the months ahead, when a new crop of university graduates and school leavers enters the worst jobs market for a generation.
Ahead of the release of Wednesday's figures, Lord Mandelson admitted that unemployment levels were "unacceptable" , but insisted that even more people would be out of work if the Tories had been in power during the recession.
Interviewed on BBC Radio 4's Today programme, the peer said: "One thing I and the Government know is that any such level of unemployment is unacceptable.
"The question is, what is the Government doing about it, and what would be the level of unemployment if the Government had not intervened in the economy in the way in which we have?"
Lord Mandelson said £5 billion was being spent on getting people back into jobs, whereas the Conservatives wanted to cut state investment in the economy by a similar amount.
IHS Global Insight economist Howard Archer said: ''Youth unemployment is a growing and very real concern.
''Unemployment still looks highly likely to rise above three million in 2010 and we suspect it could eventually peak around 3.2 million.''
He warned: ''Even if the economy does return to growth in the third quarter, activity is still unlikely to be strong enough for some considerable time to come to prevent further net job losses. In fact, we suspect that unemployment will rise for the rest of this year and much, if not all, of 2010.''
Experts say the claimant count is lagging behind the wider measure of unemployment due to individuals moving off the count on to Government schemes such as the New Deal.
The gloom is likely to be exacerbated as Mervyn King, the Bank of England Governor, issues his forecasts for the UK economy in growth and inflation forecasts due on Wednesday.
The Bank's latest inflation report should detail a steeper decline than previously predicted after a worse than expected 0.8 per cent output fall between April and June.
The forecasts will also show the Consumer Prices Index inflation benchmark used by rate-setters well below their 2 per cent target for the next two years
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