Britain 'Can't afford to throw money at crisis
Britain has 'limited' room for monoeuvre in tackling the worst global recession in 50 years because of the soaring budget deficit, according to a leading think-thank.
Without a 'credible' framework for restoring the public finances, spending even more taxpayers' money would be a waste of time, the Organisation for Economic Co-operation and Development said.
It expects Britain's economy to shrink by 3.7% this year - the sharpest fall since the years following World War II - and continue to contract in 2010 by 0.2%
There will also be a substantial rise in unemployement, with the jobless rate reaching 9.5% in 2010 - about 3million.
The outlook could ... 
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1st April 2009 - by J. Higginson - 0 Comments - Add Comment
The $1trillion slice of history
Gordon Brown marked the 'beginning of the end' of the recession yesterday as he announced world leaders had agreed a deal to inject more than $1trillion into global markets.
The prime minister said the package would save millions of jobs around the world and prevent a similar economic crisis happening again.
However, although the deal was hailed as a turning point there was no sign of the 'fiscal stimulus' which Mr Brown and Barack Obama had sought.
Shadow chancellor George Osborne said the G20 summit agreement would seem 'very remote' to ordinary people hit by the recession.
'It does not contain a single extra dollar or a single extra pound of fis... Read More
3rd April 2009 - by Metro - 22 Comments - Add Comment
Global money crisis 'is so dire war may erupt'
The economic crisis is so dire millions will face poverty, unrest and even war if banks are not cleaned up, the global finance regulator is warning.
Recovery was impossible until the financial sector become smaller and healthier, Dominique Strauss-Kahn, head of the International Monetary Fund, said yesterday.
'Bluntly, the situation is dire,' he warned. 'This will dramatically affect unemployment and, for many countries, will be at the roots of unrest, some threat to democracy and maybe also en in war.
His comments came less than two weeks before the London G20 summit, where prime minister Gordon Brown hopes to agree a global fiscal stimulus, injecting money... Read More
24th March 2009 - By J. Higgison - 321 Comments - Add Comment
Worst crisis since 1930s says Federal Reserve chief Ben Bernanke
Mr Bernanke argues that the roots of the current global economic downturn stem from global imbalances in trade and flows of capital in the late 1990s.
In a speech to the Council on Foreign Relations, he argues that the US and its trading partners did not do enough to redress these imbalances.
He also says future economic recovery depends on financial stability.
'Chronic' imbalances
Mr Bernanke says the imbalances "reflect a chronic lack of saving relative to investment in the US and some other industrial countries, combined with an extraordinary increase in saving relative to investment in many emerging markets."
As a result, saving flow... Read More
11th March 2009 - by BBC - 1 Comments - Add Comment
EU may have to print money to survive global crisis
The EU may need to print money to get out of the economic crisis, the governor of the Central Bank warned yesterday.
John Hurley spoke as the Bank of England began a process of "quantitative easing" -- to pump cash into the British economy. However, this has led to a fall in the value of the pound and could trigger inflation in the future.
Asked directly about the prospect of Europe printing money, Mr Hurley said he was in favour of examining what he described as "a legitimate operation, depending on interest rates".
The European Central Bank is currently divided on the issue. ECB president Jean-Claude Trichet has expressed doubts about the wisdom of printing... Read More
11th March 2009 - by T Molloy - 3 Comments - Add Comment
China's economy shows early signs of recovery
The Chinese economy is showing tentative signs of recovery, but analysts said that it was still too early to declare that the worst of the downturn was over.
The official purchasing managers' index (PMI), a key gauge of Chinese manufacturing, improved in February for the third month in a row as factories restocked in anticipation of an early revival in the economy despite deepening global gloom.
However, the index remained below the no-change line of 50 that marks the difference between expansion and contraction for the fifth month in a row. However, it was well clear of a record low of 38.8 that it plumbed in November. The rise in the gauge to 49.0 from 45.3 in January... Read More
5th March 2009 - by The Times - 34 Comments - Add Comment
Standard Chartered shrugs off worst of financial crisis
Peter Sands, chief executive, acknowledged that "2009 is going to be challenging" but said the downturn in Asia, Africa and the Middle East will be "shorter and shallower than in the west" as they "do not face the structural de-leveraging afflicting western markets".
Warning against comparisons with the 1990s Asian crisis, he said: "Most countries have substantial foreign currency reserves and strong fiscal positions. This time most businesses have relatively conservative balance sheets."
The improvement in profits came despite a 74pc rise in bad debts to $1.3bn and an increase in credit market and private equity impairments from $57m to $469m. The consumer bank, which saw ... Read More
3rd March 2009 - by P. Aldrick - 0 Comments - Add Comment
We all need to show humility for the economic crisis
Gordon Brown inched nearer yesterday to issuing an apology for the Government's role in the financial crisis.
Pressed on the failure of the regulatory system he set up as Chancellor, the Prime Minister said: 'We took action on the financial sector but I accept that we should have done more.
'The problem is that you are always trying to keep up with sophisticated techniques that are being introduced into the financial system.
'There are certain changes that we are making and will make for the future that will make for a better financial system.'
Mr Brown has appeared increasingly isolated from Cabinet colleagues over his refusal to express any r... Read More
4th March 2009 - by J. Chapman - 0 Comments - Add Comment
A job will be lost every 25 seconds in recession
About 320,000 jobs look set to be lost in the next 3 months as the recession hits home, experts warn.
If the cull continues at the same rate for the rest of the year unemployment will hit 3.06 million - equating to a job lost every 25 seconds.
The cuts will come from all sectors of business, from services to manufacturing, and among both large and small firms, business adviser BDO Stoy Hayward predicts. 'Business are taking swift and decisive action to tackle the challenges of the recession,' its report says.
The jobless total in Britain now stands at 1.97 million.
Despite the cull, part-time workers by 33,000 in the three months to December last year, B... Read More
2nd March 2008 - by Metro - 0 Comments - Add Comment