Thursday, 13 November 2008

UK Recession: Escape Routes Sealed

My paper of choice, the Financial Times, has undertaken a region-by-region prognosis of how old England is faring or liable to fare in this recession of ours. By the by, it serves to remind one of what we actually do for our livings in this country now – or rather, what we soon might not be doing.
This week, 1.82 million British people are officially unemployed. I’m old enough to remember two lurches past the 3 million mark, in 1981 and 1991. But it’s no time for complacency. One David Frost from the Chamber of Commerce recalls what the devastation of the early 1980s claimed on a more or less weekly basis (“It was 4,000 jobs here, 5,000 there”): this because those losses were in manufacturing, where there was so much to be lost. As the Tory economist Ruth Lea said elsewhere today, we don’t do so much of that anymore. The impact this time will be more – how shall I say it? – generously spread around the occupations. Still, you have to worry in particular about the car-makers. As of today even Germany is in recession, even though most people like a Mercedes when they see it. So one can foresee the English making do with whatever is their current ride for a while longer, maybe just giving the old banger a slightly more regular lather-and-vacuum.
London, where I live, ‘has the grimmest prospects of all’ based on its ‘heavy exposure to financial services and to the troubled property market.’ And without a regular diet of property transactions, what do accountants and lawyers and bankers do for their gravy? Clearly London bankers have already stopped buying great swathes of all that flashy shit that they base their lives around, with the inevitable knock-on effect. Meanwhile, Londoners are feeling less enthused – is that possible? – about the 2012 Olympics.
What of the two regions I know best: the North East of England and Northern Ireland? Both essentially sustained by the public sector, as it happens, ‘which gives them a degree of insulation from the turmoil’ according to Alan Wilson, senior man at the Oxford Economics consultancy. ‘That protection may, however, be short-term, as pressure on public spending grows...’ And a lot of ticky-tacky ‘luxury waterside’ box-flats in Newcastle and in Belfast are going to stay eerily empty for a good while longer.

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