Unemployment will hit two million for the first time in ten years under Labour rule. The struggling housing industry has led to thousands of workers losing jobs but not just home builders are feeling the effects. Real estate agents, mortgage brokers and others working in the financial sector are at risk. Unemployment is to increase twenty-five percent, the highest rate since July 1997. Ernst & Young has sent this warning and predicts that Britain will struggle to not fall into recession. This is the same struggle many countries are facing as well, including the United States.
Ernst & Young forecasts economic growth to be only one percent, a number which contradicts policymakers who predicted a more optimistic growth both this year and next year. One member of the Monetary Policy Committee continues to seek interest rate cuts as he reportedly believes the UK is falling into a recession. In fact, the country may already be in a recession. Action must be taken immediately, though, which is often easier said than done when it comes to monetary policy.
What is known is that unemployment in the UK will exceed the 1.6 million workers unemployed today and will reach over two million within the next year and half. The UK has not experienced a labour market as this since July 1997 and is perhaps not ready, particularly taking into account the other struggling aspects of the economy. Increased unemployment in combination with increasing food and oil prices is not a good combination for any market. Further, housing prices are predicted to decrease by fifteen percent.
Reports of record high employment are based on skewed numbers including migrant workings entering the UK and the number of retirees going back to work. The main worry today is the rising number of unemployed as is the trend these past few months, and Ernst & Young warns that the economy will likely not see the worst until it feels the full impact of the housing industry decline.
From a government standpoint, unemployment reaching two million is simply embarrassing as some have expressed. However, the problem begins even before individuals actually lose their jobs. Seeing those around them suddenly without work plants the seed of worry causing consumers to have less confidence and to begin cutting back on spending. Of course, this impacts the market as well once companies begin to lose profits. It is a cut-throat cycle.
As households struggle to make their mortgage payments and put food on the table, less confidence in the economy can only be expected. The question is what consumers can do to avoid this situation and regain some financial stability. With rising unemployment, finding a second job to supplement their income is likely not a viable option. Fortunately, the internet opens up new opportunities not available to generations past. One such opportunity is gaming.
There is a reason gaming has become the largest growing industry online with ordinary people seeing returns of as much as twelve percent. Many might argue that they simply cannot afford the risk of traditional trading, but these individuals would be pleased to learn that arbitrage trading is risk-free as former investment banker Rajeev Shah explains in his book Sports-Arbitrage – How to Place Riskless Bets and Create Tax-Free Investments. With the use of new software, it is now possible to scan prices globally in seconds and uncover risk-free betting opportunities providing guaranteed returns. Further, the UK Government recently announced through the Treasury that profits from arbitrage trading will continue to not be subject to income tax or capital gains tax. Using software today called ArbAlarm, arbitrage trading may be the extra income households need to make it through this devastating credit crunch until inflation is back under control and the labor market regains a solid footing. If anything, extra money is never a bad thing regardless of economic activity.
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