UK prediction: Unemployment will soar above 3 million in 2009, say chambers of commerce

[GliderGuider]

And the hits just keep on coming. The global nature of the economic catastrophe should by now be absolutely clear to everyone.

Unemployment will soar above 3 million in 2009, say chambers of commerce

Unemployment will soar above 3 million as Britain's manufacturers, retailers and service industries feel the full effects of the downturn, according to the British Chambers of Commerce, which said economic output is set to fall this year by more than in the last recession of the 1990s.

The jobless count will rise to 3.1 million, or 10% of the workforce, the business group predicted. It said the UK economy could shrink by as much as 2.9%, leaving the country to face the "distinct risk" of deflation this year. As a result, the government's depleted finances will remain in a parlous state for many years.

A last-minute dash to the shops at Christmas failed to lift footfall figures to last year's level, Experian said. Shopper numbers were 3.1% lower in December than they had been in the same month of 2007, despite heavy discounting that in many cases wiped out profit margins.

Experian said there had been a 21% year-on-year jump in the number of retail insolvencies, with high-profile casualties such as Woolworths, Adams and Zavvi all calling in the administrators. It predicted a further 440 retail businesses would fail in the first four months of 2009, with a total of 1,400 going under in the year as a whole.

Economists lined up to support the view that 2009 would be one of the worst years for the economy and could trigger a longer-than-predicted slump in national output.

[Hawkowl]

1. Mirror of US economy

The US and UK economies are tied very close together. It could be argued that the UK economy is actually in slightly better shape because they are actually ahead at recognizing and addressing the problems of the bursting housing bubble. Indeed the solution the Fed is now starting to pursue has been called the UK model.

In any case, my point is that the UK is expecting a 10% unemployment rate and a likelihood of deflation. They are the first of the G7 countries to admit this. The US doesn't have the social safety net that the UK does, i.e; health care, real unemployment benefits, etc. Meaning the pain in the US is going to be much more severe.

The blathering that you hear from US pundits and media whores about 2009 being the year of recovery is simply going to be the year they blame Obama for the worst recession in 80 years.