Monday, 10 December 2012
In the bleak midwinter
Like a Victorian undertaker looking forward to Winter. That’s how an esteemed colleague described a tweet of mine on Saturday when I warned about the possibility of a triple dip recession .
Vindication came my way on Sunday when no other that the Business Secretary, Vince Cable raised the very same possibility.
Why did I venture such a view? Simple. If North sea oil and factory production is down, indeed the lowest it’s been for twenty years, its not rocket science to predict that there’s a fair chance that the economy will continue its downward spiral.
Not much of what George Osborne announced in his Autumn statement is likely to change the prognoses.
The causes of my doom laden prediction are two fold. The lack of home produced demand, much of which can be blamed on Mr Osborne’s austerity programme. But the next factor can be blamed on those pesky Europeans. Their austerity programme has seen a lack of growth in the euro zone. This of course is where the UK sells most of its goods. So no growth in our biggest export market.
That powerhouse of economic activity in Europe, Germany, and the biggest economy in the single-currency area, saw output from its factories drop by 2.4% in September.
This news from Europe and the gloomy news from industry just follows a run of poor economic data for services, construction and trade. So however you look at it, it just ain’t good news.
And just as night follows day, poor production targets eventually means less jobs. Cue stage right the IPPR think tank.
IPPR have estimated that an extra 200,000 people in Britain will be without a job by this time next year. They also reckon that it will be worse for the youngsters, with youth unemployment set to rise above a million.
The think tank’s analysis is based on the pattern of the increase in 2011, a period of similar labour market change. It shows that a further 86,000 under-25s may join the dole queues next year. Long-term unemployment could rise by 32,000 to a total of 926,000. A further 47,000 people over 50 may also become unemployed.
With a hard winter, benefit cuts and lots out of work many will struggle to survive.
My friend may have hit the nail on its head. The death business may well see the only economic growth activity in the next few months. A word to the wise forget my horse racing tips, put your cash into shares in funeral service firms.