Blanchflower Sees U.K. Jobless Rising 100,000 a Month
Former Bank of England policy maker David Blanchflower said there will be “big increases” in unemployment and Britain must brace itself for the shock.
Jobless claims may rise by an average of 100,000 a month “for the next year or so, and this will be a shock for people,” he said in an interview on BBC Radio 4 today. “People are going to have to get used to these very large numbers. I don’t think people have thought what it would mean to have a million people under 25 unemployed by September.”
He said it’s “early days” to gauge whether the central bank’s policies are helping to counter the recession. The Bank of England may decide this week to leave the benchmark interest rate at 0.5 percent and to continue its plan to buy bonds with newly printed money, economists say.
“There are risks to the downside,” he said faxless payday loan. “We’ve seen over-exuberance in lending and borrowing that’s been a problem. People have had to come back to reality.”
Blanchflower spoke the day after he stepped down from a three-year term on the Monetary Policy Committee, where he said as early as November 2007 that the U.K. may face a recession, before any of his colleagues.
Policy makers, due to meet on June 4, will refrain from expanding their money-printing plan from the current 125 billion pounds ($204 billion), according to all but two of 39 forecasts in a Bloomberg News survey of economists. A separate survey also showed they will leave the key interest rate unchanged.