In just three months “youth” unemployment UK-wide has risen by the equivalent of one fully sold‑out Murrayfield – 67,000 extra unemployed 16 to 24-year-olds.
You can see why many of the young benefit‑ signers might feel pretty sold out themselves by a previous generation that has been rumbled as having binged on borrowings, from households to financial services organisations to eurozone governments.
Businesses across the piece are laying off, with British Gas, Clydesdale Bank and mining giant Rio Tinto all announcing hefty redundancies yesterday. If it is of much consolation, Scottish unemployment is rising less fast than the UK as a whole. But it is clearly not a case of put out the bunting.
The wider economic gloom deepens, with the Bank of England yesterday slashing its growth forecasts for Britain to just 1 per cent for both this year and 2012. That is sharply down from the previous growth forecasts from the Bank of about 1.5 per cent for this year and 2.2 per cent for next year.
BoE governor Sir Mervyn King blames the eurozone financial crisis for the blow to Britain’s recovery hopes. The central bank is not alone in becoming much more pessimistic, and some believe it is still whistling in the dark even with its reduced forecasts.
Quite a few City economists believe we will be lucky to see any growth to speak off next year. Howard Archer at IHS Global Insight is typical, cutting his growth forecast for 2011 from 1.7 per cent to 0.9 per cent, and his prediction for next year from 2.2 per cent to 0.8 per cent.
In short, as the eurozone financial and political crisis has spiralled out of control since July, growth forecasts behind the porticos (ramparts?) of the Bank and in the City’s glass and chrome palaces have both been massively reined in.
To the population at large it must seem that in 2012 we are looking at virtual stagnation at best and a double-dip recession at worst. Nice choice. And, as most who have experienced even medium‑term unemployment will attest, stagnation in practical terms feels very little different from outright recession.
To the unemployed, particularly those young ones who may have left universities down south with stratospheric debts, a continuing stagnant economy next year could feel like the economy is not quite reversing but their lives are.
Our best hope is that the eurozone drama finally turns out to be a chronic cliffhanger that avoided a meltdown at the end.
Then in Britain we could just get on stoically with a bloodless, baby‑steps, fragile recovery rather than having cause to be really depressed.
Game Group learns it’s modern warfare out there
STILL in the negative news zone, shares in video games retailer Game virtually halved yesterday (actually there was no virtual reality for the purveyor of Call of Duty, etc about it, the damage to the group’s stock market standing after a profits warning was all too real).
You can see Game Group’s problem. It is caught in a classic squeeze. Older teenagers and twenty‑ somethings who form a large part of its market are caught in a stultifying unemployment trap (see previous item).
At the same time, Game and its ilk are facing cut‑throat pricing competition from supermarkets and internet retailers that often sell new blockbuster game titles as loss‑leaders (the latter trend being a case of shooting the bad guys and drinking your milk literally in the same basket).
Builders sensible to get their house marginally in order
BARRATT Developments is the latest housebuilder to respond to flattish markets with a focus on profit margins rather than chasing unprofitable volume up the down escalator. Barratt and its peers have made a tentative recovery over the past two years. But the sector clearly continues to be hobbled by a lack of household finance as banks bolster reserves and insist on bigger deposits for home loans.
Rivals such as Persimmon, Taylor Wimpey and Bovis have all adopted a similar margin‑fuelled strategy in recent times. They have decided that when times are tough, housebuilders should sort out their balance sheets and be choosier on projects.
Margin restoration may have a pedestrian feel compared to flamboyant site expansion. But it looks the sound option for housebuilders given household finances, employment uncertainty and a wider economy that resembles a faltering steam train puffing towards a station called Stagnation.