house4sale

information on the UK property market

Posts Tagged ‘recession’

BCC – Recession is not over yet

July 7th, 2009

The British Chamber of Commerce (BCC) reported that it is “far too early” to forecast the end of the recession in the UK. In particular BCC noted that unemployment was expected to reach around 3.2 million by mid 2010. Perhaps more worryingly the BCC commented that without more measures to minimise effects of the recession the UK economy could “drop off” … I guess by this they mean enter into a depression (a prolonged and deep recession).

The BCC is a highly respected group, and its report is based on a survey of 5,000 businesses in the 3 months to June 2009, thus it is certainly a report that should not be ignored.

So what should the Government do to alleviate the concerns about the UK economy? There is no magic bullet here, but key is building business and consumer confidence, financial liquidity, and perhaps reducing the burden on businesses to help with employment – such as cancelling the NI tax increase scheduled for 2011.

As reported in other posts on house4sale, such feedback from business experts suggests that we are far from the point of recovery in house prices. Since starting this blog a month ago, and taking account of all of the reports studied, it would seem that we are at least 12 months away before we see any sustainable recovery in property prices.

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Posted in UK Economy, UK House Prices

Tags: house prices property prices recession

The recession is going to get worse

July 6th, 2009

So how much worse can it get?

Gordon Brown will announce at his meeting with President Sarkozy today that the world recession is going to get worse. It seems this premise is based on 3 key areas:

1 – The surge in oil prices, which have increased by 75% in the last year.

2 – Protectionism from some countries which has restricted global trade by an estimated 10%

3 – The continued inability of banks to lend, a fundamental need to assist recovery.

It is the combination of these factors which some analysts are now pointing to as the cause of concern for recovery, and more worryingly a prolonged and severe recession. For some time now analysts have been suggesting a double-dip recession, maybe the likelihood of this is now increasing.

Another key issue the UK still has to contend with is rising unemployment into 2010. Today the CBI announces what might help to mitigate this to a small degree, effectively giving workers unpaid leave rather than redundancy, this would certainly help with recover as skilled workers could be re-instated more quickly.

One thing for sure, we are certainly not out of the recession yet, lets hope our leaders can put in place the actions needed to minimise the pain everyone is going through.