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Thursday
Aug132009

Bank of England finally realises small businesses are in trouble

The Bank of England has finally woken up to the fact that the recession “appeared deeper than previously estimated” as the spectres of unemployment, home repossession and bankruptcy stalk the streets seeking more victims.

The Bank’s inflation report for the last quarter is just telling everyone trying to make a living and pay their bills what they already know – the economy has nosedived in to a ditch and is dragging hundreds of small businesses down as well. Bank of England governor Mervyn King agreed that there have been more encouraging signs from recent surveys, but said: "We will still, I think, find ourselves in a difficult position for a long time to come."

Government figures show that 222,000 jobs were lost in the quarter ending June 30. The statistics also reveal rising unemployment rates – standing at 7.6% or 2.43 million workers without jobs up from 7.4% the previous quarter. This is the highest out-of-work figure for 14 years.

Inflation is expected to hover around 1% for the rest of the year and interest rates remain unchanged at 0.5%, said the report.

With businesses still axing jobs and facing credit problems and banks writing off billions in bad loans underwritten by the taxpayer, King said: "It is likely that output stabilised in the middle of this year, and business surveys and other short-run indicators suggest that growth is more likely than not to resume over the next few quarters."

The issue faced by the bank to control the economy is quantative easing – basically printing money to buy Britain’s way out of trouble – but critics say this may be storing g up future inflation when the economy reboots.

David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The inflation report acknowledges the present fragility of the British economy and indicates that any recovery will be slow and protracted. We believe this is the correct view, and it reinforces the need for continuing with an expansionary policy stance.

“At the very least, the Bank should use the full £175bn now allotted to the quantative easing programme. The possibility of increasing the programme further may have to be considered if the economy weakens.”

 



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Reader Comments (1)

govtjobforms.in provides the latest employment news of this week.

September 26, 2017 | Unregistered Commenterstuart

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