... despite Brexit

Source: Wikipedia

UK employment total hits record high 

The number of people in work in the UK has reached a record high of 32.54 million, latest figures from the Office of National Statistics show.

Unemployment was flat, with a small increase of 8,000 between September and November for a total of 1.37 million.

Average earnings excluding bonuses increased by 3.3% in the year to November, as wage rises continued to outpace inflation.

The number of job vacancies rose by 10,000 to a record high of 853,000.

ONS head of labour market David Freeman said: "The number of people working grew again, with the share of the population in work now the highest on record.

"Meanwhile, the share of the workforce looking for work and unable to find it remains at its lowest for over 40 years, helped by a record number of job vacancies.

"Wage growth continues to outpace inflation, which fell back slightly in the latest month."

 The unemployment total is 68,000 lower than a year ago, with the jobless rate 0.2% down on this time in 2018. The number of job vacancies rose by 10,000 to a record high of 853,000.

The increase in both unemployment and employment is explained by the UK's rising population and fewer people being classed as economically inactive, which includes those on long-term sick leave, students, and people who have given up looking for a job.

The number of economically inactive people fell by 100,000 to 8.6 million, a rate of 21%, which is the lowest on record.

Employment Minister Alok Sharma said: "Our pro-business policies have helped boost private sector employment by 3.8 million since 2010, and as the Resolution Foundation's latest report shows, the 'jobs-boom has helped some of the most disadvantaged groups find employment', providing opportunities across society."

Andrew Wishart, UK economist at Capital Economics, said the figures were "reassuring, showing no sign of any hit to firms' hiring ambitions due to Brexit".

However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, warned that the pace of wage increases may begin to ease.

"We doubt that wage growth will be sustained over the next six months at November's strong rate," he said, "Pay settlements will likely weaken this year, as the previous year's inflation rate is usually the starting point for negotiations.

"Note too that public sector wage growth also will decline later this year, because most NHS workers will receive only a 1.8% pay increase, down from 3.0% in 2018. Nonetheless, the labour market now looks tight enough to ensure that wage growth does not slip below the 3% mark."

Tej Parikh, senior economist at the Institute of Directors, said the figures may not be a marker for any possible interest rate rises.

"The Bank of England will be little moved by today's data. While the momentum behind wage growth may build support for interest rate hikes, Brexit remains the spanner in the works for the monetary policy committee," he said.

Source: BBC News

Compare this news to the economic picture in January 2009:

World growth 'worst for 60 years'

World economic growth is set to fall to just 0.5% this year, its lowest rate since World War II, warns the International Monetary Fund (IMF).

In October, the IMF had predicted world output would increase by 2.2% in 2009.

It now projects the UK, which recently entered recession, will see its economy shrink by 2.8% next year, the worst contraction among advanced nations.

The IMF says financial markets remain under stress and the global economy has taken a "sharp turn for the worse".

In another gloomy view of the UK economy, the Institute for Fiscal Studies (IFS) said Britain would be saddled with government debt for more than 20 years.

IFS director Robert Chote warned that spending would have to be cut or taxes raised by more than planned to allow public finances to recover.

The predictions came as Pascal Lamy, the director general of the World Trade Organization, urged countries not to react to the global economic crisis by resorting to protectionism.

Speaking from the World Economic Forum in Davos, Mr Lamy said such a move would be "a big mistake".

'Virtual halt'

According to the IMF, the outcome of the economic slowdown has been to send global output and trade plummeting.

"We now expect the global economy to come to a virtual halt," said IMF chief economist Olivier Blanchard in a statement.

The IMF says that despite a number of policy moves, which have been carried out by many states, financial strains remain.

International co-operation is needed now to draw up new policy initiatives, and for capital injections to support "viable financial institutions".

Meanwhile, it predicts that the eurozone economy is poised to shrink by 2.0% in 2009 and the US economy by 1.6%.

Banking crisis

The report comes on the same day the International Labour Organization said that as many as 51 million jobs worldwide could be lost this year because of the global economic crisis.

It had been hoped that growth in developing nations would continue at a steady pace and help offset the recession in developed nations such as the US and UK.

But the seemingly endless crisis in the banking system has put paid to that notion.

Countries such as China are now struggling with a collapse in demand from their primary export markets.

Meanwhile, developed economies such as Japan, Spain, the US and UK are in recession, with new job losses being announced on a daily basis.

'Uncertainty'

The IMF says that growth in emerging and developing economies is expected to slow sharply, from 6.25% in 2008 to 3.25% in 2009.

It cites the main reasons for the drop as being falling export demand, lower commodity prices and much tighter external financing constraints.

The IMF points out that policy efforts to tackle the downturn so far - such as liquidity support, deposit insurance and recapitalisation - have been drawn up to address the immediate threats to financial stability.

However, it says that these emergency measures "have done little to resolve the uncertainty about the long-term solvency of financial institutions".

"The process of loss recognition and restructuring of bad loans is still incomplete," says the IMF's World Economic Outlook Update.

'Bad bank'

The IMF says future co-ordinated financial policies should concentrate on recognising the scale of financial institutions' losses and on providing public support to those institutions that are viable.

"Such policies should be supported by measures to resolve insolvent banks and set up public agencies to dispose of the bad debts, including possibly through a 'bad bank' approach, while safeguarding public resources."

The IMF says the global economy is projected to experience a gradual recovery in 2010, with growth picking up to 3%.

"However, the outlook is highly uncertain, and the timing and pace of the recovery depend critically on strong policy actions," it warns.

Source: BBC News

Spanish economy woes

Spain, which has enjoyed 14 years of consecutive growth, has gone into sudden reverse.

Analysts expect figures to show that the country is already in recession, with GDP falling since the middle of last year.

The gloomy statistics are building up. Last week, they showed that industrial output had tumbled by 15.1%, the biggest fall on record, and the country's unemployment rate hit a 12-year high in 2008 of three million.

BBC News website readers in Spain have been sending their stories about how the slowdown is affecting them.

ELISA ARIAS, JOURNALIST AND PR, MADRID

I came back to Spain after two and a half years living in the UK because the credit crunch prompted me to do it earlier than I expected to - and the situation cannot be more devastating.

I was hired by an online newspaper and was promised a one-month contract but when I arrived there was no contract, so I worked there on a temporary basis for three weeks.

The newspaper closed down this week and 40 people, some with young children, will lose their jobs.

Because I had no contract, I have no unemployment benefit or social security. I lived in Madrid, but was forced to go to Malaga to my parents' house.

Many magazines, websites and local televisions have closed down, so it is almost impossible to get a job.

I feel ridiculous leaving CVs everywhere, because I know it's not worth it, it just doesn't make any sense.

It is almost impossible for highly-educated job-seekers like me to find a job. The problem in Spain is that almost everyone has a university degree, so you have to do something else, like a masters or doctorate degree. But in this situation, it doesn't even help.

The figures given yesterday by the government were depressing: three million unemployed - one million more than last year. And the figures may rise one more million in 2009.

Many young people are like me, they don't have any proper contracts or social security. That's why we all live with our parents until we are 30 years old.

You usually have to stay and put up with almost illegal contracts until they finally hire you, and this happens very frequently with journalists.

I think for employers it is too expensive to hire new people, because they have to pay many benefits. This should be regulated in a different way so that more jobs are created.


RICARDO, COMPANY DIRECTOR, BARCELONA

The economy here is at its worst, hundreds of jobs and companies disappearing every day and prices rising.

From the point of view of operating a business in Spain, it is unsustainable in the long run. Spanish legislation is so rigid and in favour of employees, that it is hard for businesses to restructure and adapt to the crisis.

If you need to restructure and cut jobs or change the salaries, even if it is temporary, you are not allowed to do so. So you can't save your business and end up in bankruptcy.

This affects employment because as an employer, when I want to hire people I would rather employ them as freelancers because it is too expensive to give them a contract.

Credit is very difficult to get and it is not easy to get credit cards or get in debt. So people are not heavily indebted, but they are definitely poorer because the salaries are low and haven't gone up in line with prices.

People are not buying and demand has certainly gone down. Demand for our products has fallen by 50%.

If the current situation persists and the government does not change its legislation I do not see many companies staying in Spain or investing in the future. The outlook is definitely gloomy.


LOUISE BRACE, ADVERTISING, MALAGA

I live in Malaga province and have been running a small advertising agency for five years. Our agency tries to help Spanish business communicate with the ex-pat market and we also help the British connect with the local businesses.

We have been exceptionally hard hit here, because of the crash in the construction and real estate market and of course the bad publicity that we have received, because of the ongoing problem of fraud within local councils.

This region relies a lot on real estate and tourism and this is what has kept the southern region of Andalucia going.

Now it's all drying up and business is next to nothing. We try to find jobs to supplement our business and pay our mortgages, but there are no jobs.

Our bank has now frozen our overdraft and asked for the money back immediately. They just told us that we should try to find the money from another bank to pay it off, or ask my family.

The treatment of small to medium-sized businesses by the banks here has had a huge effect on the crisis. With nearly 90% of the business population in this category, they are literally wiping us out with their lack of support in times of crisis. They are taking away loans and overdrafts, not helping to fund our survival.

As much business from ex-pats has been going badly, many people, including ourselves, are trying to sell their properties, but it's difficult.

Everybody is selling their properties on the Costa del Sol well below what they are worth, because of the recession and because of the drop in foreign buyers.

Brand new developments with gymnasiums and pools are selling at half-price. There are many empty buildings and empty complexes without a licence. It used to be said that Spain's emblem was the crane, but I think promoters and builders just built and built and now not enough people are buying their properties.

I think they built to satisfy a market of people who were trying to get away from built-up areas and then ruined it by overbuilding.


NEIL SCOTT, CONTRACTOR, SITGES

We live and work in Spain and have been here for the last ten years, my brother and I have a company that does renovations. Around 60% of our clients are from overseas and the rest are residents.

We haven't been affected particularly as our client base is strong and in the upper market level and people are still doing renovations, but construction has taken a nosedive.

We have seen expensive properties which were started a couple of years ago and now just standing partially completed and the machinery abandoned.

We didn't notice the downturn until September, as we usually rest for two months during the summer. Spain shuts down in that time.

But when we came back to work and went to buy materials, we found out that all our credit accounts had been suspended. We usually buy all the materials, put a deposit down and then pay the rest over the next six weeks, but that has stopped.

I didn't know it, but this credit line is debt factored by an insurance company which guarantees the money, and they just stopped the credit.

We managed to survive doing private arrangements because we have been living here for ten years, always pay on time and have a good track record. But many contractors now can't get any credit and this dries up construction.

What is really noticeable now is that shops are starting to close in the towns, and the once busy bars and restaurants are also closing and are virtually empty in the evenings.

Sitges on a Friday night is now totally dead - this was unheard of before.

You have to remember that here in Spain the personal debt problems that people experience in the UK just don't exist to the same level. Here, if you haven't got money in the bank they won't let you spend it and credit cards are paid at the end of the month in full. It is very difficult to rack up a large personal debt.

Source: BBC News