It followed record price rises for the October to November period in food, clothing and furniture, the Office for National Statistics (ONS) said.

CPI inflation remains well above the government target of 2%.

Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 4.7% from 4.5%.

Food and non-alcoholic drink prices were up by 1.6% between October and November, compared with a rise of 0.6% a year ago, the ONS said.

Clothing prices also rose by a record amount - of 2% - between the two months, with the biggest price rises found in men's outerwear.

Furniture, household equipment and maintenance also showed a record price rise of 1.6% between October and November.

The Bank of England expects inflation to remain high into next year, pushed higher by rises in VAT from 17.5% to 20% at the start of the year.

Some believe this will provide a screen that will allow retailers to put through more extensive price increases.

A report released on Tuesday by KPMG said that 60% of retailers and consumer product manufacturers planned to increase their prices over and above the VAT rise.

A British Retail Consortium spokesman, however, said the report was "nonsense".

The inflation rate has now remained above the 2% target by one percentage point or more for 12 months, and the Bank of England's governor, Mervyn King, has had to write four letters to the chancellor this year.

But with the new government having announced the biggest round of budget cuts since World War II, the Bank still expects the resulting slowdown in spending to bring inflation down over the next two years.

Commenting on the inflation figures, BNP Paribas economist Alan Clarke, said: "It's a disappointing number and it's only going to get worse in the next couple of months."

"Next month is utility bills, the month after that is VAT, it's all one-way traffic at the moment."

Source

Read about and study the recession with recession books.

The internet is a mine of information on the recession, but it can be a bit overpowering when studying or researching a certain angle on the recession.

Many books have been written covering many aspects of the recession, such as "how to get a job during a recession" or "profiting from property during a recession", even "sex in the recession" may interest someone.

Browse our selected recession books.

US Auctions Australian Auctions Austrian Auctions Belgian Auctions Canadian Auctions French Auctions German Auctions Indian Auctions Irish Auctions Italian Auctions Dutch Auctions Polish Auctions Spanish Auctions Swiss Auctions UK Auctions

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Politics of Recession Mullard Maurice 9781848448711 NEW Book    £71.85

BOOK AUDIOBOOK CD Thomas Sowell Economics Recession THE HOUSING BOOM AND BUST    £22.09

Global Recession Indian Economic Development Book HB NEW 8177082302 GDN    £21.74

The Global Great Recession Book | E Ray Canterbery HB NEW 9814322768 GDN    £25.65

England after the Great Recession Tra BOOK] BRAND NEW    £66.23

Innovating in a global crisis Riding the whirlwind of recession Book HB NEW GDN    £14.99

From Recession to Upturn Financial Management Strategy Law Firms Book NEW PB GDN    £52.25

Temporary Assistance Needy Families TANF the Recession Book HB NEW 1617283037    £87.35

Recession Survival A Self Assembly Kit Businesses of All Sizes Book | Tom Taylor    £15.00

Financial Markets the Global Recession Book HB NEW 1607419211 GDN    £98.74

The Spectre at the Feast Capitalist Crisis the Politics of Recession Book NEW    £16.48

Success in Recession Richard H Lomax Good Book    £12.68

View Page:   1  2  3

The pound has fallen sharply against the dollar and the euro after a Bank of England policymaker said the UK could yet fall back into recession.

The pound fell 2.4 cents, or 1.5%, against the dollar, to $1.503. Against the euro, it fell 1 cent, or 0.9%, to 1.100 euros.

The Bank's Monetary Policy Committee member Andrew Sentance said there was a chance of a double-dip recession.

The pound has been falling recently in the run-up to the general election.

"You have to recognise there is some risk of a double dip, but that's not the central forecast," Mr Sentance said.

The UK exited recession during the last three months of last year, but growth remains weak.

There are also concerns about the high level of UK public debt, although figures released on Thursday suggest borrowing this financial year will come in under the government's forecast.

Deficit cuts

Uncertainty about who will win the election, and whether there might be a hung parliament, has increased concerns about plans to cut debt levels.

This uncertainty has weighed on the pound.

The government has been forced to borrow heavily during the downturn, and the UK's budget deficit currently stands at 12.6% of GDP, one the highest in Europe.

Labour has announced plans to reduce the deficit to 4.7% by 2015, arguing that making more drastic cuts could harm the UK's recovery from recession.

But a European Union report released earlier this week said the plans were not ambitious enough.

The Conservatives also argue that cuts need to be made more quickly.

From the bbc

I have recently been reading a book that was recommended to me and found it worth a mention here.

The Eighties Recession Revisited

As the Recession starts to deepen, John O’Donoghue, author of Sectioned: A Life Interrupted (John Murray, 2009) recalls the Recession of the early Eighties

Three million unemployed; business shedding jobs on a daily basis; homelessness on the increase; an unpopular government facing a tricky election; a war overseas; terrorism at home. 2010? No – I’m referring to 1982, the year Britain changed forever.

   Behind the headlines from what now seems like a far-off date in history lie stories of hardship, devastation, and bewilderment. What is happening to Britain? Why is the country on its knees? How do we get it back on track?

 I didn’t do too badly myself – I managed to get a flat-share in Hampstead, right on the Heath; a job with Ryman’s, the stationers; I was putting my adolescent demons behind me. But within a year I’d fallen out with my flat-mate, moved out, taken a job as a hospital porter, and was in a homeless hostel in Kilburn.

From there I ended up going back into mental hospital, and began my odyssey through a changed Britain. More homeless hostels, more spells in hospital, unemployment, the streets, squats, prison – just about everything that could go wrong for me went wrong.

Nor was I alone. In my memoir, I try to tell not just my own story, but the story of my times. I saw just what the Recession was doing to people, saw the potential wasted, the lives blighted, the talent frustrated. Broken Britain seems to be a recent phenomenon – but I saw its foundations, which were laid in the Eighties.

I turned the corner in 1988, when I was lucky enough to get into university. I had three O Levels and an Elementary Swimming Certificate to my name but the University of East Anglia (motto: ‘Do Different’) took me in, and in 1992 I graduated, a married man with children, a decent job, and prospects.

I’m now a Lecturer in Creative Writing, have a fairly decent standard of living, and have been published by John Murray, Byron’s publisher, Jane Austen’s publisher, Darwin’s, Betjeman’s, Paddy Leigh Fermor’s. But I look at my eldest, and I worry.

He could lose his job tomorrow, drift into drugs, homelessness, mental illness, despair. Come to that, I could lose my job. It’s perhaps easier when you’re young and single to come through hard times than when you’re middle-aged with dependents. And I wouldn’t want to go through it all again, not now. No way.

But I think I’ve showed that at least I’m resilient. And I hope my son will be resilient too. Because I’d hate for him to have go through a Recession like I went through.

And I’m aware that somewhere out there tonight, in Middle England, or in some corner of this green and pleasant land, a young lad or lass is facing challenges like I had to face, maybe worse. Or perhaps it’s sa family, where the main breadwinner has lost their job, and repossession looms, with the devastation that comes in its wake. I hope that they come through. That the safety net holds for them. That someone realises that there is such a thing as society, and that it should be every politicians’ priority to fix our country, and not just line their pockets.

Because – as I saw myself – a Recession can be a killer. Especially when you’re young, vulnerable, and are in danger of falling through the net.

Like I was.

Sectioned: A Life Interrupted is available on Amazon.co.uk, priced £5.07 paperback; £11.04 hardback, and at all good bookshops.

www.johnodonoghue.co.uk

www.twitter.com/JOD45

Note: The webmaster wishes john every success for the future.

Britain's middle classes face the biggest financial squeeze for decades that will drastically affect their living standards, according to new research.
The findings show the typical family will face a decline in their income of around £300 - or 2.4 per cent - next year through higher taxes, mortgages and rises in the costs of food and other goods.
The richest in society will also see their spending power cut by up to nine per cent - which amounts to almost £5,000 a year.

They may be hit even further by this week's Pre Budget Report, which is expected to tighten the screw on higher earners.
But the less well-off are expected to actually see their spending power rise next year. A single mother who receives around £10,000 a year is due to have an extra £130 annually.
Accountants PricewaterhouseCoopers calculated the amounts based on the Government's current tax rules and future plans

The results showed that a middle-income family on around £30,000 a year with two young children and an unemployed partner will see their spending squeezed because of higher mortgage payments, a rise in petrol prices and planned rises in national insurance contributions.
Mortgage rates are assumed by PwC to increase from an average of 3 per cent in 2010, to 3.5 per cent in 2011 and 4.75 per cent in 2012.
Other expected rises in the cost of living is expected to make it financially harder for middle class families.
John Hawksworth, head of macroeconomics at PwC, told the Independent: 'While not large in absolute terms, these increases imply much larger percentage increases in mortgage payments from their present low base.
'This has a particularly significant effect on our high-earner, given their large mortgage, with smaller but still material effects on our discretionary spending budgets of our middle-income couple.

Daily mail

Unemployment will continue to rise in the new year, Work and Pensions Secretary Yvette Cooper predicted.

With figures showing almost 2.5 million people out of work in the three months to September, Ms Cooper said that total would keep growing in 2010.

The Government does not make formal forecasts on jobless figures, she told Sky News Sunday Live, but added: "We do expect unemployment to keep increasing in the new year."

As Chancellor Alistair Darling puts finishing touches to Wednesday's Pre Budget Report, Ms Cooper also said she hoped youth unemployment would fall in the second half of 2010.

The number of 16 to 24-year-olds out of work has reached a record high of 943,000, meaning almost one in five are not employed.

But recent figures have shown a slowing in the rate of rising unemployment, and Ms Cooper said: "I think if we see current trends continue and if we have a big further push to help, particularly on youth unemployment, and if we see employers also helping us and that's what I think should be our priority now. I do think we should be aiming, particularly for youth unemployment, to try and get youth unemployment falling in the second half of next year rather than see it rising for four or five years after the recession which is what happened in the 1980s. "We must never go back to that."

£200 billion govt debt ?

Public borrowing rose by a further £14.8bn last month (september), taking the half-yearly figure to its highest ever level

September's rise means Government net borrowing stands at £77.3bn for the six months of the financial year so far.

That is the highest half-yearly figure since Office for National Statistics (ONS) records began in 1946.

The Treasury expects borrowing to reach a record £175bn for the year as the cost of the recession drains public finances.

Total spending stood at £45.7bn over the month compared with just £35.4bn in receipts.

This is because the Government is having to spend more on outlays such as unemployment benefits but is receiving less as the jobless total rises.

Net benefit payouts were up nearly 10% on the same month last year to £13.8bn, while the Government's VAT and income tax revenues were both down by more than 13% on 12 months earlier.

The Government spent £5.9bn in interest payments on the debt - 43% above the same month last year and the highest monthly payout on record, according to the ONS.

The nation's net debt now stands at £824.8bn, representing 59% of the UK's entire economic output - another new record.

September's borrowing was actually lower than the £15.3bn expected by the City. But it is almost double the £8.7bn seen a year earlier.

Vicky Redwood, of Capital Economics, says the Chancellor will have to raise his projections for public borrowing in the Pre-Budget Report.

"At this rate, borrowing still looks likely to reach over £200bn, compared to Alistair Darling's £175bn forecast," she said.

From sky news

UK Recession prompts massive car boot sale

Like most families that are struggling to make ends meet, Gordon brown has initiated what has been called a massive car boot sale.

Gordon brown hopes to raise 16 billion pounds to help bail the uk economy out of the mire. The money will be raised by selling national assets such as the channel tunnel, the dartford crossing, the tote, and the student loan book.

Gordon browns announcement

Nouriel Roubini: Dr doom, warning

Dr Roubini, a Professor of Economics at New York University's Stern School of Business who warned of looming financial disaster in 2006, also warned that commodity markets will fall as the slow pace of recovery disappoints investors.

Many stock markets have enjoyed their best-ever half-year rises as fears of a global depression have rapidly lifted. The FTSE All-World index at its best was recently up nearly 70% from the bottom. Emerging markets have risen more than 90%

'Eventually markets are going to flatten out and correct to valuations that are justified. I see a growing gap between what markets are doing and the weaker real economic activities

The International Monetary Fund predicts the global economy will expand by 3.1% in 2010 led by growth in Asia after a 1.1% contraction this year. Roubini said that is still 'anaemic' and 'very weak'.

Stock markets took a battering at the end of last week after a shocking surge in US unemployment. The rate now stands at 9.8% and is likely to push higher well into next year.

 Dr Roubini has warned before on inflated stock markets. In April, one month into the current rally, he said: 'I'm still cautious and bearish. I believe we are closer to a bottom in the stock market than a year ago but this is a bear-market rally. I think the market is way ahead of real economic and financial data. I think people are deluding themselves.

He then stepped up his warnings in August of a 'double-dip' recession or a slow 'U-shaped' recovery. Dr Roubini, who is also chairman and co-founder of economic forecaster RGE Monitor, said then that the recession in the US and UK would not be 'formally over' before the end of the year with 'green shoots still mixed with weeds'.

He cited the prospect of unemployment higher than 10% by 2010 in key economies. 'This is bad news for demand and bank losses, but also for workers' skills, a key factor behind long-term labour productivity growth,' he wrote.

He also warned on debts, saying 'deleveraging has not begun yet', and said consumers would need to cut spending in the face of falling home prices and stock markets and shrinking incomes and employment. Other reasons for pessimism, he said, included the 'severely damaged' financial system, weak profitability and growing public sector debts

Other respected commentators have warned of further economic hardship. In August, Nobel laureate economist Paul Krugman said a full global recovery may take two years or more. While billionaire investor Warren Buffett warned of the severe side-effects that would be created from racking up huge government debts and the following danger of the political temptation to print money to salvage the situation.

Why have shares risen so fast?

Stock markets price in sentiment and all the information known to investors. So in the simplest of terms: in March 2009, stock market investors were braced for a worst-case scenario - a global depression on a par with the last one of the 1930s. Then the mood changed dramatically with analysts expecting a return to growth before the end of the year. Several factors sparked the volte-face. Initially, seemingly successful bank bailouts averted fears of a total collaspse of the financial system. Then massive stimilus packages, including quantitative easing or 'money printing' programmes gave a colossal boost to confidence.

Some of these measures have also made it far cheaper for companies to borrow money, reducing their costs. Other drastic cost-cutting by companies has helped stabilise profits and forced analysts to upgrade their downbeat projections. If these expected profit improvements don't materialise, the rally may run out of steam, and shares, on some basic measures, are beginning to look expensive.

This is money

All statistics and past and present information indicate that the recession has a long way to go. A whole decade or two. From recession to depression….it can happen….why…….

Borrowing money now to fix the current state of economy (short term goal as everything else in politics will only make further future debts even higher then they should be especially the way the western international banks charge interests, rates never stay low…for long periods unless we become a nation that conforms to the Islamic way of banking where interest are not allowed hence their economies have low interest for life….which I highly doubt the big banks in the our part of the world will ever allow that.
This huge debt burden will be passed down to a future generation who are yet to finish the primarily school. We have to think how is this future generation is going to make all this money up and if the state of the economy at that period will allow or facilitate them to do just that, they will have make very large contribution in tax from their wages, assuming that highly paid private sector jobs will be available to them in this country in huge numbers, which I will explain a later stage.
The new generation that we will be relying on or passing on the debt burden will be fewer in numbers in terms of total working population, as we no the current lifestyle in the UK has been for a while is to have one or two kids some leaving it to their 40s to have kids and when they do they are not having kids like so called baby bloomers who are currently going into the retirement stage….which as you should of guessed by now that their pensions are paid by the present working population through tax and national insurance contribution for the state pension, and private company pension is paid by the present earnings of the present pension fund that is invested in stocks and shares, hence when money is whipped off the stock market where all these company have locked the employees pensions, you create what is a pension black hole!!.
On top of that as the baby bloomers are now expected to live longer which will means the total payout will be much higher then any forecast made by the NHS or any government health agency/ treasury, as they will have to payout for longer time period on the other hand medical treatment cost or NHS costs will sky rocket as older people get they tend to have more medical treatment needs and the fact the current population trend suggest that there will be 3 pensioners per one adult working assuming that in the future all adults will be employed and pay their tax and is enough to pay for public services and the NHS bill. I guess someone somewhere has been working on a balance…between pension costs and medical costs. ie I have no doubts that the smoking band and other such policy is probably worked out with above two ratios in mind. For each one has such I high costs related to it, probably cost levels are as high current debt levels…which very alarming.

the next major factor that can push us further into a depression is our position as a property/ mortgage lead economy and its consequences for the nation. Many have cashed their pensions or transferred most of the saving to property at the height of the property boom, hoping that it will be a nice little nest egg for them to spend from when retired, thinking that the property price will keep going up at a fast rate, however like all things, it is much dependent on the state of economy, prices can co go down to any value they were in the past, depending on the state of the economy a recession like this with such high debt levels going back to levels of the1950 depression debt levels. A house once thought to be security can now be a huge burden on the taker of the mortgage, interest rates will never stay low as they are at some point they will rise and with the rise those that are still employed and paying the mortgage will suddenly find themselves paying much higher mortgage payments which will either leave them with very little of amount of disposable income, intern affecting other parts of the economy such as retail sales etc….or losing their houses all together. This will affect millions. Like the millions already affected in the property market in the so called stabilisation of the property market we have seen in last two years 2008-2009, those that are still hanging or depending on the property market as a livelihood are in for a big surprise and soon add further numbers on unemployment counter.

The other major factor intertwined with the above two factors I already mentioned is in the job creation areas. We need more private sector jobs to be created then public sector jobs and theses jobs need replace many of the jobs that we have lost and may never get those types of jobs again. Public sector jobs is funded by tax collected from the private sectors, many jobs in the past 5 years were created by government or local governments which are not sustainable, and we see the affects of that phiscally in the economy in the next few years as especially after the general election. This massive stimulus package has been great for the economy but only in the short term by keeping jobs for bit longer, but because they were short term solutions based politics, and not addressing the real problems, like the sensational news that we have now without much depth of analysis then it reasonable to believe we have bought year of good statistics for the price of ten years of bad statistics, if only politicians stop to think about themselves and really put the country first. As the stimulus package runs out and the economy will face the same problems it had before the stimulus package, unless new wave of stimulus is available and if we can afford to have them and not because on a whim of politician who wants to keep their seats. More we borrow more we have to pay back, the further in red we go and the only out is to pay it all back starting from now, hence the jobs creation is the only vital thing that will enable us out of this financial meltdown. We need really seriously look into this the creation of jobs and business development especially as we are now in a global world, we cannot afford to think locally, nationally without taking into context that we are competeting globally for business and jobs. Radical rethinking must be applied if we are going to be competitive in a world platform where technology is rapidly increasing reducing the barriers of protectionism and driving competition to extent that those that embrace the technology through people intellect and technology infrastructure and lowering costs maybe win the hearts of big multinationals, conglomerates…(meaning jobs)
Just looking in the past history of UK, from the close down of coal mines and heavy industrial business that once thrived in the UK and employed many people and to its demise which probably lead to increase of a manufacturing sector rising and in the late eighties as we all now to well that came crashing down due international competition from overseas who were producing faster and cheaper, this however lead to rethinking of the UK job market, where UK then found it self becoming a service sector economy where most people were employed in what is now as tertiary and quaternary economy, people working in offices and retail which lead to us becoming a nation of shopper holics and shopping over our means leading as to a position we now as a nation, a mortgage lead/ debt based economy. Where the rise in our property value is actually our so called wealth and not the actual property. The affects of this model we adopted we are now feeling the wrath of it and will always feel it as it as become a business cycle of boom and bust, majority of society will always get busted and lose everything, as they say in gambling, ‘the house always wins’.

In the UK we have enjoyed what could described as a world leader in finance and banking, where many countries have relish the UK model and expertise that could found here, many of the world biggest companies had many advantages of locating to the UK for that reason which intend gave the UK great boost especially in job creation we had in city of London. However with the recent crisis due to the financial institutions of UK and America…this may have been hampered….will the growing economies of India and china want a financial model like us or any other countries want model their systems on our systems…with that in mind we have to look at the pace of technology and its effects to national economies. There’s is a huge potential that we may be facing yet another crisis of jobs that we are losing now may never come back to the UK due to this digital technological revolution, as internet and software now play a integral part in companies operations and a source of economies of scale to be reached many of the jobs that once was not feasible to be outsourced overseas can be done so, from back office jobs, customer services, accountants, law to teaching jobs. Majority of theses can now be outsourced overseas for much lower costs, ie accountants and law jobs that require much of their time going through paper and analysing documents can be sent digitally to anywhere in the world and sent back for to countries they originated from to be signed of by one main accountant, lawyer etc.

Going back to my earlier point of a lost generation. the future does look bleak unless we have radical rethinking about education, job creation and attracting business to the UK, we need more then a Peter Mandelson to save our economy, maybe we should put all the top university economics and business professors together in one room to find solutions for the future of UK.

In my opinion the recession (depression) will last 8 –12 years with unemployment reaching 6– 7 million around 2012-2014. the lost generation that I refer is a generation who are will be unemployed for long periods time first of them will be educated and not find jobs and the later will be a fall out from schools that are under funded and whose parents will be unemployed growing up with poverty which will lead a social breakdown in communities and crime rates soaring all over the country. In cities This cause the neglect of housing estates as founding are cut back from redevelopment, the problem will be expiated as recent city redevelopments during the boom in housing market where space was of great value, many extra dwelling were created very close proximity to each other at the expense of social areas, where you get an area clustered in many people it only takes a few grieved teenagers and drug related activities taken up by a few to wreck an entire neighbourhood. Making some areas no go zone, as depicted in many of the late 80s movies.

For my opinion on the solutions on the above scenarios and a way out of this cataclysmic mess please watch this space and more writings from the ‘Economist Dude’

Next blog topic ‘what the rise of China and India means for western world’ coming soon.