The Paris-based Organisation for Economic Co-operation and Development (or OECD) has revised down its expectations for global growth – to 2.7% this year, from 3.1% expected back in May. OECD economists cite the trouble in the USA over levels of government debt and the resulting shutdown, alongside the United States federal reserve and the effects of slowing down their digital money printing tactics. In the Financial Times, Martin Wolf discusses the limits on global growth and, perhaps controversially, puts the blame on an excess of savings across the world. (FT p.15)
However, for the UK, the OECD report was flowing with more optimism – for the time-being at least – as the British economy is set to grow by 1.4% in 2013, and by an expected 2.4% over the course of next year. (FT p.3)
In today’s Independent, the front page blares the warning of “Britain’s next debt time-bomb”. As if the current struggles with government overspending weren’t enough, it seems that a new threat is developing from levels of personal debt. According to the Centre for Social Justice, 3.9 million British families lack savings to cover even one month’s mortgage or rent. In total, households owe the equivalent of 94% of the UK’s economic output, according to the CSJ. Meanwhile Andrew Grice, political editor at the Indie, says some ministers are concerned that excessively low interest rates are not encouraging people to pay down debt as fast as in some other countries.
(The Independent, p.1, p.14)
Yorkshire Building Society is today announcing 36 new mortgage offers, adding to the spate of new 95% mortgages coming onto the market. According to the Daily Mail (page 10) , the number of 95% mortagges on the market has now reached over 100, up from 64 yesterday and 42 last month. But – there is still some way to go until lost ground is made up – the number of these 95% mortgages stood at 986 back in August 2007.
This morning’s City A.M. leads with the headline “Too many grads not enough jobs” –covering statistics released yesterday from the ONS on graduates in the labour market. Almost half of the UK’s recent graduates now in employment are not making full use of their skills, with 47% working in “non-graduate jobs”, where their work does not require a degree. Despite recent economic growth the graduate unemployment rate has also barely fallen since 2009, now standing at 8.82% compared to 8.99% four years ago in the brimstone of recession. In the Daily Telegraph, Andrew Hunter of jobs search engine Adzuna puts this in the context of wider improvements in the job market – with just 1.9 jobseekers now competing for each vacancy, compared to 2.3 at this point last year, though he adds, “But for those who are fresh out of university, the prospects of finding that first job remain gloomy”.
On a less gloomy note for graduates, a degree might still seem like a good idea compared to other routes – those with a degree still have much better chances than those without. On the other side of the fence, those with just GCSE qualifications have to wait until the age of 32 before their wages “level out at £19,000”. (The Guardian, p.7)