Guardian UK: 'Thousands face job loss in UK'

Hundreds of thousands face job loss in UK, says top economist
Ashley Seager
The Guardian, Monday July 21, 2008



Britain's economy is tipping headlong into a recession that could last more than a year and cost hundreds of thousands of jobs, warns Professor David Blanchflower, a member of the Bank of England's interest rate committee, in an interview with the Guardian today.

Blanchflower says the Bank must cut interest rates rapidly to prevent the downturn being too painful, and thinks the UK could be in for a worse time than even the United States, where interest rates have already been slashed and taxes cut to stimulate the economy.

The economist said the recent rises in unemployment are "the tip of the iceberg". The number of people out of work and claiming benefit is 840,000 but the broader measure of unemployment is 1.6 million, 5.2% of the workforce. Blanchflower said it could climb to more than 7% - a figure that would mean several hundred thousand people losing their jobs.

His warning comes days after the chancellor acknowledged that the slowdown could be "profound" and hinted he would change the Treasury's fiscal rules as the slowing economy looks set to bust them.

Today a leading thinktank, the Ernst & Young Item Club, says the economic outlook for Britain is like a "horror movie" as a result of the credit crunch and tumbling house prices. ......(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/jul/21/inflation.economicgrowth2