May 2012 – UK Economy has Stalled
No sign of improvement in the UK economy as slow or zero growth, the Euro crisis and falling house prices add to the woes.
In most parts of the UK, London and the South East being the main exception, unemployment is set to continue rising for the next 5 years. That’s according to forecasting group The Centre for Economics and Business Research (CEBR) that predicts the overall jobless rate could hit 10.7% by 2016, the highest for more than a decade.
Although the government says that this view is pessimistic and does not coincide with the views of other economic forecasters, especially as UK unemployment fell by 35,000 to 2.65m between last December and February, CEBR says it could ultimately rise to levels not seen since the early 1990s.
Bond traders are warning Tuesday 8th May that the euro could go into freefall over the next few weeks as investors compare it to the sub-prime mortgage crisis. European voters have given austerity measures a clear “nulls points” and now currency experts are predicting a grim future for the euro, even if some of the countries in the euro can manage their way though the crisis.
Early trading has seen the GB pound and US dollar soar against the Euro which will boost the UK pound and the US dollar - good for our "safe-haven" status, but bad for exports which might otherwise boost UK growth.
The early January and February 2012 rebound in the housing market has run out of steam according to a Royal Institution of Chartered Surveyor’s (RICS) survey. The records price declines and falling sales across the UK in April, still more evidence of a broader economic slowdown.
The RICS report said that 19% more surveyors have reported price falls than price rises, while the number of properties on the books of Estate Agent surveyors rose again. Only London it seems is defying the downturn. Surveyors in the capital report a different picture from the rest of the UK. 86% of London surveyors report prices the same or rising.
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