Discussing the CBI’s latest economic forecast, Lambert admits that 2009 is going to be a pretty bleak year – and “2010 isn’t going to be much better”.
But we’re over the worst. Over the course of the year, the economy will start to stabilise, gradually picking up in 2010. “By the final quarter of next year, with a bit of luck, it will go back to something like a respectable growth rate,” he says.
With its flexible labour market and flexible currency, the UK will rebound from the recession quicker than other countries. Lambert comments: “The biggest victims are those countries that are exposed to international trade, such as Japan or Germany.”
Unemployment in this country is still a thorny issue. Describing it as a “lagging indicator”, Lambert reckons the number of Britons out of work will continue to rise throughout the the year – even as the economy flatlines – and will peak at roughly three million. “Within that, there’ll be a steep rise in youth unemployment, which is deeply worrying,” he says.
Lambert hit out at the government and the obsession with what’s going on in Westminster. “It’s time for politicians to get a grip,” he says. “There are big issues out there that won’t wait: the state of public finances; rising unemployment; climate change; and financial regulation.
“While the mood among businesses has improved – as Stuart Rose of M&S put it, ‘Maybe we’re just fed up of being fed up’ – people need a far greater sense of confidence that public finances will be sorted out,” he continues. “Right now, people can see huge deficits and they’re wondering whether public finances will be cut all over the place or whether taxes will go up, or both. That doesn’t encourage entrepreneurs to get out of bed in the morning.
My advice We just have to get on with it."
Watch the full vodcast with the CBI’s Richard Lambert here.
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