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Tuesday, October 5, 2010

Two News Stories about the UK

While America is suffering a continuing Great Recession, no real recovery in sight, economic problems are not just limited to us and the PIIGS nations of Europe (Portugal, Ireland, Italy, Greece & Spain)   Here's two news stories showing the affects of recession on Great Britain:

IMF admits that the West is stuck in near depression - UK Telegraph

"If you strip away the political correctness, Chapter Three of the IMF's World Economic Outlook more or less condemns Southern Europe to death by slow suffocation and leaves little doubt that fiscal tightening will trap North Europe, Britain and America in slump for a long time."

"The IMF report – "Will It Hurt? Macroeconomic Effects of Fiscal Consolidation" – implicitly argues that austerity will do more damage than so far admitted.  Normally, tightening of 1pc of GDP in one country leads to a 0.5pc loss of growth after two years. It is another story when half the globe is in trouble and tightening in lockstep. Lost growth would be double if interest rates are already zero, and if everybody cuts spending at once"

 UK Treasury chief Says Austerity Measures Will Help Economy- AP
"Britain will cap payments to jobless families and scrap child benefits for high earners in a sweeping overhaul of the country's welfare system, Treasury chief George Osborne said Monday."
"On Sunday, about 7,000 labor union members — including teachers and health service workers — staged a march outside the Conservative convention, to protest at planned spending cuts. Labor unions plan further protests to coincide with Osborne's announcement to Parliament."

" "Everyone can agree that we need a fairer economy built on higher, better balanced growth. But the spending and benefit cuts will do the opposite — pushing many people into poverty, hitting middle income Britain hard and threatening growth," said Brendan Barber, general secretary of the Trades Union Congress."

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