A blue Christmas

MPC member Professor David Blanchflower says that 2,000 people will lose their jobs daily over the next four months. That means 2 million would be unemployed by Christmas – the highest unemployment level since Labour arrived in Downing Street in 1997. He also said that there would be no jobs for hundreds of thousands of school leavers and that his previous prediction that house prices could fall by 30 per cent may now be optimistic. He says interest rate cuts are needed quickly to prevent the current economic crisis leaving long lasting damage.

He told Reuters:
 

“People have to start to respond to the fact that we are in a recession and the danger is that we will be in a very serious and long-lasting recession unless we do something…

“I certainly think we are in negative growth now and I expect several further quarters.”

“To sit and worry about inflation expectations and what is going to happen to those, rather than worry about the fact that the economy is going to go into a recession, seems to be misguided.”