Green Shoots of Recovery?

Yesterday I criticised politicians who are raising hopes of an early recovery from recession, saying they were perpetrating a cruel hoax on the public.

Even if the economy begins to grow again, unemployment will continue to rise.

There are 890,000 people under the age of 25 now unemplyed, and likely to jump to over 1 million when the Class of ’09 join the dole queue later this month.

One of my favourite ecocomists, David Blanchflower, formerly a dissenting yet prophetic voice on the Bank of England’s Monetary Policy Committee, described this as “a tragedy for the nation”.

The Bank of England, in it’s latest quarterly bulletin, reported that more than a million households are now in negative equity, and house prices will probably fall a further 15%!

David Blanchflower, writing in Thursday’s Telegraph, said: “We are faced with a toxic cocktail: sliding house prices, rising negative equity, inadequate levels of credit” (needed for growth to sustain economic recovery) “soaring unemployment and zero, or even negative, wage growth.

“In such circumstances, it is almost academic to try to pinpoint whether economic growth is returning.

“The simple fact remains that we have yet to realise just how painful the coming years are likely to be”.

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