Beating the recession: It's all down to the G20

Articles

Beating the recession: It's all down to the G20

A preview of the upcoming G20 meeting held over the weekend further reiterated the key economic players assertion of how important the meeting, to be held next month in London will be to set the global economic climate back on track. A turnaround is required, and soon, to avoid continued economic turbulence seen in the 1930s, the UK government has warned.

Signs that the UK situation is going from bad to worse was that news recently announce by the Trade Unions Council (TUC) that for every job vacancy in the UK there is an average of ten applicants going after it. In the South of England, the unemployment situation appears to be reaching catastrophic proportions where only one in sixty is successful in finding work.

The latest official data due to be published on Wednesday by the Office for National Statistics is estimated to reveal that UK unemployment has now passed the two million mark.

The British Chambers of Commerce (BCC) continue to hold firm on their estimations that unemployment in the United Kingdom will reach over three million by the second half of next year. A figure that represents over 10% of the country's workforce

Talking about playing fiddle with the UK burns, is the news that Prime Minister Gordon Brown's brainwave that the treasury should offer rebates to drivers who trade in old cars for new ones would be unfeasibly expensive a sure sign that the Brown's and his Business Secretary Peter Mandelson might be destined for the scrap heap. What it appears that Brown and Mandelson failed to take into account was that the last thing that the average UK citizen might need at this time is a new car.

Brown and Mandelson are working hard in an effort to offset continuing demands for more support for industry in the face of recession, against increasing a budget deficit that looks like swelling to at least 8 percent of gross domestic product. However on the old cars for new scheme, it looks like "back to the drawing board" for Peter and Gordon.

Despite that bit of bad news for the UK motor industry, stocks on the FTSE rose for a second consecutive day, which meant that the FTSE 100 enjoyed its largest weekly gain since early January. The rise was on the back in the increase in commodities particularly oil and base metal.

The FTSE 100 climbed by 1.6 percent, (58.12 to 3,770.18) making for a weekly gain of 6.8 percent. The FTSE 250 also rose a 1.51 percent (92.83 to 6255.37)

Sterling also continued to rise on Friday against major currencies, finishing as follows.

Pound/US dollar 1.4225
Pound/Euro 1.0923
Pound/Japanese Yen 139.75
Pound/Swiss Franc 1.6833

Ben Bernanke, head of the US central bank and apparently America's perennial optimist supreme, continues to announce that he expects the recession to begin to turn around by the end this year.

"This decline will begin to moderate and we'll begin to see a leveling off," announced the Federal Reserve chairman in a recent interview on national television. He also hastened to add during his interview that without US government intervention last year, the world would have come to financial meltdown

We'll see recovery beginning next year," Bernanke added "the

Government fund of $500bn was stabilising the mortgage market and business lending was picking up. "

Among the signs that he may know what he is talking about is that the Dow Jones index rose by about 10% last week alone after it had plunged to a previous twelve year low. Dow Jones closed on Friday up 59.32 points to 7223.98 and NASDAQ up a modest 5.4 points to 1431.5

Metals were on the ascendancy in Asia with copper continuing the recovery in global equities after concerns about a deepening global recession and waning metals demand seemed to be waning.

Crude oil traded near $47 a barrel after futures jumped 11 percent yesterday. The contract for April delivery is set for a fourth week of gains, with OPEC due to meet this weekend to consider a cut in output.