The UK economic data for Q4 2010 was staggeringly bad. The economy contracted by 0.5% when economists had predicted growth of around 0.5%. If the next set of UK numbers look like this then the country will be officially back in recession – the dreaded ‘double-dip’ where growth is not strong enough to sustain recovery from the last recession.
The economic downturn at the end of the past decade was the worst I have known in my life. In 2008, I lost all of my clients and I was also in the middle of getting divorced – so I was paying for two houses in London. Not the ideal time to be increasing costs and reducing income! Still, I rode that out with a reduction in savings, I found new clients, and now I have moved to Brazil where the economy is growing.
But when I look back at the UK now, I can see so many more real problems that I could never see before, not least in terms of economic stagnation. I don’t mean in the terms an economist would use, I just mean in human terms.
Food prices are going up, it’s harder to borrow money for major purchases such as a house, fuel costs are increasing… but worst of all, I know of at least four friends who are searching for a job. Highly skilled, qualified, experienced, and able people out there searching for work. I’ve never seen this before even back in the hard times of the early 90s or the dot com crash a decade ago.
If the people in London with degrees and experience are getting turfed out into the gutter, then what’s happening to less affluent parts of the UK – especially where they depend heavily on the public sector for work? Wait and see, because the public sector job cuts are only just beginning…