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Sunday, 6 July 2008

It just keeps getting worse

Every day the news on the economy in the UK, the US and the eurozone just seems to be getting worse and worse. There seem to be few silver linings at the moment and the prospect of recession in the US, the UK and in a number of eurozone economies is becoming ever more likely.

The UK may technically just about avoid a recession but it is going to be a struggle. There are a number of adjustments in the economy that are going to happen before we start to see more normal economic activity.

Sadly we are only at the start of the economic downturn. There is likely to be at least another twelve months of pain. Housing prices will fall, unemployment will rise and the governments budget will be strained.

The main hope is that world commodity prices might fall as the world economy slows. Lowering inflation next year, giving consumers a break and providing the international central banks with the room to cut interest rates and stimulate growth. However, with the volatile nature of commodities at the moment I wouldn't like to guess where they will be in a years time - its hard enough to tell where they'll be in a weeks time.

Its all looking pretty grim at the moment. Here's hoping for a summer lull...

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posted by Carl Malways at | 0 Comments Links to this post