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Ups and downs in the jobs market
This week has been marked by announcements from many firms detailing job losses or new job opportunities. On Monday 26th January 70,000 jobs were cut across the US, Europe and the UK, as firms felt the effects of the economic downturn. As the week continued other firms in the UK such as Corus, E.On, Zavvi and Transport for London all announced that they would be making redundancies to make savings.
However, it hasn’t all been doom and gloom as there have also been announcements of job creation. Supermarkets have been spearheading the job increase with ASDA planning to create 7,000 jobs this year, hoping to recruit individuals that have been long-term unemployed to fill 3,000 of the jobs created. Morrisons and Sainsbury’s also plan to create 5,000 new jobs each, with Waitrose creating 4,000 jobs and Tesco creating an extra 10,000 jobs.
Let’s now review the other top money stories of the past week commencing the26th January 2009.
Tuesday 27th January
High street sales fall for 10th month running – A study by the Confederation of British Industry (CBI) has reported that high street sales are down for the 10th month running. The survey found that 47% of high street retailers reported a fall in sales in the first two weeks of January, with 52% of retailers expecting sales to fall in February.
Government unveils rescue package for car industry – The Business Secretary Lord Mandelson announced today a rescue package for the car industry that could be worth up to £2.3billion. The package includes guaranteeing up to £1.3bn of auto industry loans from the European Investment Bank and guaranteeing a further £1bn of loans to back investments that are not eligible for support from the European lender. Lord Mandelson says that the government will only support schemes that create new jobs, develop new technology and processes for the long term and provide value for money. Those in the car industry have welcomed the scheme.
However, it hasn’t all been doom and gloom as there have also been announcements of job creation. Supermarkets have been spearheading the job increase with ASDA planning to create 7,000 jobs this year, hoping to recruit individuals that have been long-term unemployed to fill 3,000 of the jobs created. Morrisons and Sainsbury’s also plan to create 5,000 new jobs each, with Waitrose creating 4,000 jobs and Tesco creating an extra 10,000 jobs.
Let’s now review the other top money stories of the past week commencing the26th January 2009.
Tuesday 27th January
High street sales fall for 10th month running – A study by the Confederation of British Industry (CBI) has reported that high street sales are down for the 10th month running. The survey found that 47% of high street retailers reported a fall in sales in the first two weeks of January, with 52% of retailers expecting sales to fall in February.
Government unveils rescue package for car industry – The Business Secretary Lord Mandelson announced today a rescue package for the car industry that could be worth up to £2.3billion. The package includes guaranteeing up to £1.3bn of auto industry loans from the European Investment Bank and guaranteeing a further £1bn of loans to back investments that are not eligible for support from the European lender. Lord Mandelson says that the government will only support schemes that create new jobs, develop new technology and processes for the long term and provide value for money. Those in the car industry have welcomed the scheme.
Thursday 29th January
UK to be hardest hit - The International Monetary Fund (IMF) has delivered a pretty bleak outlook for the UK economy as its latest report has indicated that the UK will be the hardest hit industrial nation by the economic downturn. The IMF has forecast that the UK economy will shrink by 2.8% this year, and in 2010 the UK economy is only predicted to grow by 0.2%. It isn’t just the UK that is predicted to have a tough year as the USA, France, Germany and Russia are also expected to see their economies shrink. The IMF predicts that overall the world economy will grow by 0.5% in 2009, increasing to 3% in 2010.
House prices continue to fall –The start of 2009 has seen house prices continue to fall, as the Nationwide House Price Index reported a fall in house prices of 1.3% in January. However the rate at which prices have been falling has slowed as prices fell by 2.5% in December 2008. The Nationwide – the UK’s largest building society now estimate the average house in the UK costs £150,501 which is £35,543 less than the average price of a house in October 2007. The Land Registry also released its latest statistics today, reporting that house prices fell by 13.5% over the course of 2008. The Land Registry compiles its statistics from completed house sales and reports that in October 2008 the number of completed house sales in England and Wales fell to 41,123, which is down 60% from 102,597 in October 2007. Even though house prices have fallen the Nationwide highlighted the uncertainty many people feel over their jobs and the lack of available and affordable mortgages as key reasons why house sales remained low. As house prices have fallen many people have become concerned about their housing situation. For information on how to keep on top of things Credit Action has some great resources that could be of use to you.
UK to be hardest hit - The International Monetary Fund (IMF) has delivered a pretty bleak outlook for the UK economy as its latest report has indicated that the UK will be the hardest hit industrial nation by the economic downturn. The IMF has forecast that the UK economy will shrink by 2.8% this year, and in 2010 the UK economy is only predicted to grow by 0.2%. It isn’t just the UK that is predicted to have a tough year as the USA, France, Germany and Russia are also expected to see their economies shrink. The IMF predicts that overall the world economy will grow by 0.5% in 2009, increasing to 3% in 2010.
House prices continue to fall –The start of 2009 has seen house prices continue to fall, as the Nationwide House Price Index reported a fall in house prices of 1.3% in January. However the rate at which prices have been falling has slowed as prices fell by 2.5% in December 2008. The Nationwide – the UK’s largest building society now estimate the average house in the UK costs £150,501 which is £35,543 less than the average price of a house in October 2007. The Land Registry also released its latest statistics today, reporting that house prices fell by 13.5% over the course of 2008. The Land Registry compiles its statistics from completed house sales and reports that in October 2008 the number of completed house sales in England and Wales fell to 41,123, which is down 60% from 102,597 in October 2007. Even though house prices have fallen the Nationwide highlighted the uncertainty many people feel over their jobs and the lack of available and affordable mortgages as key reasons why house sales remained low. As house prices have fallen many people have become concerned about their housing situation. For information on how to keep on top of things Credit Action has some great resources that could be of use to you.
Friday 30th January
Mortgage approvals fall overall in 2008 - The British Bankers Association (BBA) and the Bank of England have both released reports this week announcing the number of mortgages that were approved in 2008. Although there was an increase in the number of mortgages approved in December 2008 – the Bank of England reports there were 31,000 mortgage approvals in December, up from 27,000 in November- overall the Bank of England says that mortgage lending was 58% less in 2008 when compared with 2007. It is this tightened lending which has contributed to house sales being so low.
Consumer confidence in the UK falls - The consumer sentiment index conducted by research group GFK NOP has shown that confidence amongst consumers in the UK has fallen to a low not seen since last July. In January the index fell to -37, a fall of 4 points from -33 in December 2008. A year ago consumer confidence was at -13 points, which shows as the credit crunch began to bite consumer confidence started to wane. GFK NOP have pointed out that consumer confidence did not fall this low even in the recessions of the early 1980s and 1990s.
Calls for increases in redundancy pay - Union leaders have called for the level of statutory redundancy pay to be increased. Union leaders believe that the maximum redundancy pay has failed to reflect the increases seen in average earnings since it was first introduced in 1965. Statutory redundancy pay is calculated on the basis of half a week's pay for each full year of service for workers aged less that 22; one week for those ages 22-41; and one and a half weeks for those older than 41. If you have been made redundant or would like more information, Credit Action has recently produced a Redundancy Moneymanual that can be downloaded from their website.
Mortgage approvals fall overall in 2008 - The British Bankers Association (BBA) and the Bank of England have both released reports this week announcing the number of mortgages that were approved in 2008. Although there was an increase in the number of mortgages approved in December 2008 – the Bank of England reports there were 31,000 mortgage approvals in December, up from 27,000 in November- overall the Bank of England says that mortgage lending was 58% less in 2008 when compared with 2007. It is this tightened lending which has contributed to house sales being so low.
Consumer confidence in the UK falls - The consumer sentiment index conducted by research group GFK NOP has shown that confidence amongst consumers in the UK has fallen to a low not seen since last July. In January the index fell to -37, a fall of 4 points from -33 in December 2008. A year ago consumer confidence was at -13 points, which shows as the credit crunch began to bite consumer confidence started to wane. GFK NOP have pointed out that consumer confidence did not fall this low even in the recessions of the early 1980s and 1990s.
Calls for increases in redundancy pay - Union leaders have called for the level of statutory redundancy pay to be increased. Union leaders believe that the maximum redundancy pay has failed to reflect the increases seen in average earnings since it was first introduced in 1965. Statutory redundancy pay is calculated on the basis of half a week's pay for each full year of service for workers aged less that 22; one week for those ages 22-41; and one and a half weeks for those older than 41. If you have been made redundant or would like more information, Credit Action has recently produced a Redundancy Moneymanual that can be downloaded from their website.
Prepared for moneybasics by Joanna Parsley, Advocacy Officer (Credit Action).
| Top Money Stories January 26th - 30th 2009 |
