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More than three million expected to be jobless next year

Monday, 16 February 2009

Writes Hazel Cottrell
hazel.cottrell@consumerchoices.co.uk

It’s all doom and gloom as soaring unemployment, further house price falls and a dramatic shrinking of the economy are predicted in the latest report from the CBI.

Unemployment is set to hit 2.9 million this year and top three million in 2010, according to the latest economic outlook report from Britain’s leading employers’ organisation, the Confederation of British Industry (CBI) (www.cbi.org.uk). This would be the highest level of unemployment since 1986.

The CBI also predicts that:

• House prices will fall 15.5% this year and a further 6.7% in 2010
• 2009 will see the single biggest drop in output (3.3%) since the Second World War
• The government will have to borrow £100 billion more than it thought in order to tackle the recession.

Ian McCafferty, the CBI’s chief economic adviser, said: “Given the rapid contraction in global economic activity, and the continuing credit squeeze, we believe the UK will be mired in a deep recession for the whole of 2009, lasting six quarters in total and accompanied by a significant rise in unemployment.”

Richard Lambert, director general of the CBI warned that the situation would worsen if the government did not act fast.

“Ultimately the severity of this recession will depend on the speedy implementation of the government’s measures to unblock the credit markets and the success of various global stimuli packages in repairing business and consumer confidence,” he said.

Chris Eagle, commercial manager at CreditChoices.co.uk “It’s clear this recession is not going to be easy, but it’s important to stay positive and to help you we’ve come up with some survival tips below. If you are worried about unemployment, make sure you read our expert advice on redundancy in a recession.”

To beat the recession you should try to do the following:

• Cut your debts – Ensure you are paying the lowest rate on your borrowing and try to pay more than the minimum repayments each month.
• Spend less – Think carefully about all your purchases and remember that making small sacrifices now could leave you much better off in the long term.
• Reduce your bills – Make sure you are on the cheapest tariffs for your gas and electricity, mobile phone and broadband. Switching these could save you £100s.
• Save if you can – With the future looking uncertain, building up a rainy day fund is definitely a good idea.

Download our Complete Guide to Saving Money >>>