Sky News business editor Michael Wilson

It’s all happening far too fast for comfort. When I said yesterday that I was looking forward to the jobs figures today, I was expecting something fairly flat.

What should have been happening is that, even though the economy is clearly on the wane, the relatively low cost of labour – up till now wage inflation has been dormant - was prompting employers to hang on to their workforce rather than show them the door.

The theory was that companies would rather ride the downward ‘blip’, in the hope that it was just that, and that an upturn was on the way. And even if staff were sacked, the healthy list of job vacancies which the Government has been proud to espouse would soak up the sacked.

The reality is clearly very different and alarming. Unemployment is up by 14,000 and the claimant count - those out of work but looking for a new job – has increased for the third month in row, by 7,200.

Not huge figures in an economy which now boasts almost 8 million people of working age who are now economically ‘inactive’, but it looks like the start of a worrying trend.

And the insistent and insidious enemy of economic stability, wage inflation, has started to rise again.

Couple that with yesterday’s jump in inflation and a housing market in its worst state for thirty years; add to it the 10p income tax u-turn which will add another £2.7bn to the Government’s borrowing and push it up to £45bn, compared with Gordon Brown’s 2007 Budget prediction of £30bn; and then mix in the Bank of England’s latest gloomy predictions of higher inflation and lower growth.

To paraphrase one of our greatest football managers, ‘it’s squeaky bum time.’ Then again he does have Ronaldo. Most of the players in our little drama, by contrast, have two left feet.

Comments

[Trevor 15 May 2008 17:39:20]

"To paraphrase one of our greatest football managers, ‘it’s squeaky bum time.’ Then again he does have Ronaldo. Most of the players in our little drama, by contrast, have two left feet."

BRILLIANT, Sky Team - a very succinct summary of the crappy "team" we're stuck with !
Shades of Third Division South (if anyone else can remember that !)

[Trevor 15 May 2008 17:36:42]

Anne Macclesfield ...
"Don't blame me - I voted Conservative" !

[anne macclesfield 15 May 2008 14:01:25]

about four years agao i said to my husband "labour is great, more jobs, cleaner areas, less crime and i felt a little better off with money", but now the bill are costing us a fortune gas £500 for winter, were can we get that sort of money from within a month to pay it also electric, petrol we sold a very small 4x4 because of the tax increse we got a old people carrier, as we go camping for our holidays, and now the tax and petrol are going up on that as well. Everything we have to buy ie food clothes for the kids all go on the visa. I know people are a lot worse off, but us hard working people to make a better future for our childrn and to retire are getting hit very hard. can someone help the true uk people who need it.

[derek parrott, plymouth, devon 15 May 2008 09:03:00]

Blairs labour party ruined our country, but Brown is even more inept, this silly little child is lost and hasn't got a clue. Are we certain that the government is not being paid by another country to make our nation bankrupt? There isn't an ounce of common sense applied to any government decisions. Please please please someone out there do something NOW!

[purps, chelmsford 14 May 2008 18:39:22]

This time the downturn coincides with numbers of Eastern Europeans and other immigrants who have flooded into England.
When peple start losing their jobs, their homes, and get nothing, they will turn and look at these people and the civil unrest will begin.

I expect a summer riot or two as the speed up of job losses and claiments rises.
For too long the Labour government have been keen to feed the people of this country with a diet of celebrity, boose and flat panel TV's.
When people realise what they have lost they will come out fighting.
The UK economy is in dire straights, I am worried and expect the IMF to be called in again, as in the 1970's.

Labour and Brown in particular should be strung up from lamposts in whitehall.

[Elizabeth Davies Cape Town 14 May 2008 16:52:34]

The "Fat banks" have sung. The Chancellor is running around in little circles trying to save Brown's "sweaky bum". The UK economy will take a couple of years to come right, the end of the era for the Labour party, it's Labour's Boom and Boom and then bust economy!

[Khalid 14 May 2008 15:07:17]

Sir
Since records began, the number of those claiming the seeking of many a job has been manipulated to an extent that one can only but summise them as [Akon]
By contrast, benefit claimants are manipulated to an extent beyond the realms of law and if I may by way of example provide factual findings that if you sneeze when infront of an advisor of benefits, so to speak, your claim is suspended, and a new claim thereby required to be made. The impact of this action is that one, it keeps those within DWP occupied, angers the claimants, who gets barred for say 6 months, an old claim stops and a new claim starts thereafter when it suits the department. To top it all up, when you submit case documents to James Purnell via e-mail as allowed by virtue of Civil Procedures Rules, he deletes them, denies all knowledge and hey presto, who emerges as a liar? The good old claimant who doesnt allow politics to get in the way of self sufficiency yet trundles along to business prosperity whilst at the same time attempts to get it through many a thick skull that the reason for going self employed is to provide for future sufficiency and that legislative returns made to HMRC etc are shared between departments if only the lazy bankers got off their back sides and updated the systems as oppose to claiming bonuses for reducing the numbers out of work.
All in all, is it any wonder why many a [Lonely] policy is just full of bull?

[Nick C, Jersey 14 May 2008 14:27:08]

Would you care to quantify and justify the statement about "a housing market in its worst state for 30 years"? All that we are seeing at the moment is a correction of house prices that have been overinflated over the past few years.

[Steve, London 14 May 2008 14:24:40]

I think it's been "squeeky bum time" for the economy for quite a few years, it's just that the figures have been hiding behind the scenes up until now, waiting to pounce.

The City does seem to have a tendency to stick its head in the sand when things look like they're going badly wrong, and to only voice its concerns properly when it's too late.

Where was all this concern when the government was clearly storing up problems for the future by constantly overborrowing with no incentive given for growth?

[Michael Cornwall 14 May 2008 13:36:40]

I was very impressed with your guest David on your show yesterday.He had the measure and spoke clearly about what was in front of him.But he must also had been reading all our comments too! As he ended by saying it is a time for good leadership. I do think that is a big issue,we dont feel we are being well led. I agree with you too that we all think we can ride out the blip,but leadership is about confidence and inspiration,I run a shop so I have not got it but I and others do look,and have the right to look to the top for it.