Wednesday, 14 November 2012

One swallow does not a summer make

Unemployment in Wales is down. It is now 121,000. Down by 14,000 from the same time last year. But with an unemployment rate of 8.2% it is still higher than the UK average of 7.8%.

The Office for National Statistics(ONS) say that whilst the unemployment figures were down by 7,000 overall in the last three months it rose for women. 

A figure that the Welsh TUC were quick to latch on to. Their economic policy officer Alex Bevan said “Unemployment amongst women in Wales has also risen by 1.5% since this time last year, adding yet more evidence to the case that austerity guarantees deepening inequality.”  

Many economist attribute the positive figures less to real growth and more to an increase in part-time jobs. 

Welcome though the figures are, it would be dangerous to breath a sigh of relief that the hard times are over. The new dawn hasn’t arrived yet. 

That old Jonah, Sir Mervyn King the governor of the Bank of England was quick to put a damper on things. He reckons the UK economy is at risk of a triple-dip recession.  And just to make sure that Cameron and Clegg have sleepless nights, he says the UK economy is going to have persistently low growth. And this low level  will bump along the bottom until the next election.

He’s cut Britain's growth forecast to 1% next year and warned that output was more likely than not to remain below pre-crisis levels over the next three years. 

The much heralded growth of 1% in the last quarter which brought to an end the double-dip recession was seen by King as driven one-off factors.  It was the Olympics that did it. Now? Well, no legacy for the economy. Just barely holding our own. He goes further and says that if the contraction continues into 2013, then the UK could be looking at a triple-dip recession.

If that woe was not enough, King just had to pile on more misery. Not just making us miserable with his forecast of low growth his Bank of England has also said that inflation will be up as well. It’s now expected to rise to 3% and not likely to drop until late in 2013.

So the chances of the government getting the economy back on track by the time of the next election don’t look that great. It doesn’t take Mystic Meg to predict trouble ahead.  With wages frozen and inflation eating at living standards the voters ain’t going to be very happy bunnies. They’ll certainly be feeling the pinch and may be looking to allocate blame. 
Not the best of circumstances to go to the country. Without doubt when the time comes for the nation to place the crosses young Ed will be reminding the voter, that “its the economy, stupid.” 

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