According to the Forum of Private Business’s Economic Adviser, Professor Whyman, a lecturer in Business and Economics at the University of Central Lancashire:
“The current economic situation is serious. GDP growth for 2011 is likely to come in below 1% once figures are in, and predictions for next year range from 1.2% to 0.5%, with the Office for Budgetary Responsibility (OBR) predicting 0.7% as its mid-point forecast.
“This is very weak indeed, and indicates that the economy is more fragile than most commentators realised.”
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As a consequence Professor Whyman said he expects UK unemployment to reach 2.9 million, a figure he says is down to private sector expansion stalling in the face of global uncertainty – but less than the three million plus predicted by other economic commentators.
“Job losses in the public sector have not been compensated for by a rapid expansion in private sector employment, as predicted by the OBR a year or more ago, and it’s not surprising why this has not occurred,” he explained.
“Employers base investment and hiring decisions upon expectations for the future, and, with the current weak trading conditions, external factors such as the eurozone crisis, falling consumer expenditure and a continued reluctance for financial institutions to provide inexpensive loans for expansion purposes, these expectations are unlikely to improve in the near future unless something changes.
“What is becoming increasingly apparent is that, while the 2008 ‘credit crunch’ recession was not as deep as the ‘Great Depression’, the UK is in danger of suffering a far slower, more sluggish recovery. This could be potentially more damaging in the medium term.”
