The Organisation for Economic Co-operation and Development, (OECD), warned that the UK austerity measures pose “headwinds” to growth, and has significantly cut its forecast for the UK in 2011, to only 1.7%, down from 2.5%. They also stated that the housing market is at risk of a double-dip downturn that poses significant risks to recovery, on the back of comments that net mortgage lending for 2010 would be the lowest since 1980, amid stagnant property demand.
This weeks bail out for the Irish economy is possibly the first in a number required to protect the Eurozone from further sovereign debt defaults, with Spain, Portugal, Turkey and Greece remaining in serious economic strife.
In the UK a total of 1.6m jobs will be lost across the economy as a result of the Government’s deficit reduction programme, according to the Chartered Institute of Personal and Development (CIPD). It estimates spending cuts will account for 725,000 of those losses, the hike in VAT to 20% a further 250,000, and knock-on redundancies in the private sector of 625,000. When these are added to the current unemployment figures the total will likely be higher than in the recession of the 1990’s.