Source: ForexYard
Britain’s economy is set to continue its downward spiral into 2011. Economists previously forecasted that Britain’s economy will recover by the third quarter of 2010. However, forecasts have been adjusted due to the worse than previously expected financial crisis that Britain is going through.
At the end of 2008, the Confederation of British Industry (CBI) predicted that unemployment may reach a peak of 3 million people by the 3rd quarter of 2010. The CBI recently met with the Chancellor of the Exchequer Alistair Darling, and discussed the current economic crisis, which has hit Britain more than its neighbors, such as Germany, France, and Italy.
The leader of the opposition, David Cameron also clashed in Parliament with Prime Minister Gordon Brown, regarding whether to increase the current level of capital spending of 5 billion pounds to boost the economy. Cameron argues that Brown has not done enough to increase the fiscal stimulus of the British economy.
Market analysts forecast that London will be hit more than other cities in Britain due to the way in which the economy of each of these cities has grown in recent years. It is forecasted that up to 500,000 London jobs are set to be cut by the 1st quarter of 2011.
The number of people that are claiming unemployment benefits in Britain has increased to its highest level since the early 1990s. This has added additional negative pressure to an economy which is already in a deep crisis. Economists believe that the economy will start to recover by the 3rd quarter of 2011. However, in the short-medium term, Britain’s economy will continue to be one of the worst affected by the current economic crisis in the European Union.
Forex Market Analysis provided by ForexYard.
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