The Grim Outlook for UK Unemployment in 2009

The business news in 2009 has got off to a pretty grim start. A revised economic forecast from the British Chambers of Commerce sees unemployment rising to 3.1 million during 2009, or approximately 10% of the workforce.

Interestingly, the spectre of falling prices (deflation) is also highlighted in the report. The forecast anticipate deflation for significant periods during 2009. That might sound like good news for consumers (falling prices), but deflation is generally bad news for any hope of a return to economic growth.

David Frost, the BCC Director General, makes some quotes on the latest, dire forecast:

“Some of the strain can be avoided, but only if the Government can address the two key problems of confidence and cash-flow. We must avoid losing viable companies during this downturn.

“It will be business that drives the UK out of this economic downturn.”