Britain’s economy in ‘worst financial situation for 70 years’
Oct 13th, 2008 by ctoop
News Week: 13th October 2008
The Centre for Economics and Business Research consultancy has said that this is now the worst financial situation that we have seen for 70 years. As a result of this they predict that by the end of next year 60,000 workers from the Financial City will have lost their jobs; this will reduce the employment level in the City to a level similar to a decade ago.
The credit crunch is hitting supermarket suppliers hard; government has had to step in to ask the four big supermarkets to pay their suppliers. A massive 51% of small firms have noticed an increase in the time that it takes to be paid by the supermarkets.
The food and farming secretary Hilary Benn has said “a single late payment can be the difference between survival and collapse”. And often one in ten business failures can be traced back to the fact that supermarkets don’t pay their invoices in time.
The Royal Bank of Scotland’s shareholders were in for an unfortunate week as 60% of the bank is expected to be given to the taxpayer as part of a government bailout. This will see RBS becoming the biggest casualty so far, during this financial crisis.
This news has also shaken up the city, as the idea that a firm with assets of £1.8 trillion could be nationalised represents a cataclysm in the banking world. The RBS chief executive Sir Fred Goodwin and Chairman Sir Tom McKillop are expected soon to quit as I is believed that they have some part of the blame in the banks current predicament.
The government has had to make a £95m payout to keep the Olympic Village on course, this is after fears that the funding is drying up. The developer had struggled to come up with its share of the funding and had to scale down the plans.
A £40m pool and fitness center has now been scrapped due to the lack of available finances. Ministers agreed to the idea of the cash injection form the contingency fund until a funding solution can be found.
Fears have emerged this week that 100,000 public sector workers could lose their jobs as government finances appear to be running out. The predictions of the nationwide job loses came after inflation hit a 16 year high of 5.2%.
There are 34,000 jobs earmarked for the chop from three Whitehall departments and justice officials have drawn up plans to get rid of 10,000 jobs in an effort to save £900m over two years.
By Charlotte Toop
