There can be very few people in Britain who are unaware that we have been living in times of recession — economic 'crisis', fiscal 'meltdown', call it what you will, it has been until very recently the central theme of TV news and newspaper headlines. Bankers, hedge-fund managers and anybody vaguely connected with the 'finance industry' bore the brunt of collective vilification for several months as those responsible for triggering the collapse of once revered companies seemed often to walk away with pensions the size of which the rest of us can only dream about.
The reality, of course, was rather different — but we always need someone to blame when things go wrong. Now, of course, it is Members of Parliament, including Cabinet Ministers — those who were very quick to express moral outrage about the irresponsibility of short-selling brokers — who are in the frame for their financial misdemeanours.
Even without all of the media coverage, however, many of us, even if not directly affected by the recession in terms of losing our job or seeing our future financial prospects evaporate, know people who have been hit financially in one way or another, or have seen the struggle in which shops and stores are engaged as they are forced to compete with each other to sometimes ruinous levels. We may welcome the plethora of 'bargains' to be had - but can they last?
The statistics spell out the harsh reality of the current economic climate. Since the last quarter of 2008 unemployment has risen by 1.3% to reach a total of 7.1% — about the same as in the early 1980s recession and slightly higher than the more recent recession in 1991. Over half a million people have lost their jobs and the prediction, based on the last recession in the early 1990s, is that it will be at least six years before employment rates return to their previous levels.
People who have kept their jobs but own a home are not immune to the impact of the current recession. The value of their property according to the Halifax House Price Index has fallen since the beginning of 2008 by 15% or more — from an average price across the country of £180,473 to £154,016. Those on variable rate mortgages, however, may be consoled by a very significant drop in the interest that they are paying, but rates will rise again at some stage. Those who follow changes in Gross Domestic Product (GDP) will be similarly dismayed by the statistics. GDP fell in Britain during the first quarter of this year by 1.6%, following a similar fall in the last quarter of 2008. The economy is expected to shrink by 3.5% this year - the worst decline since 1946.
It is against this gloomy background that the Generation Recession project has been conducted. It is clear that people — even those unaffected directly — are worried, especially about their future financial security. But are there some positive lessons to be learnt that will not only help us to survive financially over the next one, two, three or more years that the recession and its after effects are expected to last but put us, perhaps, in better stead for the future when the economy has improved? Do we have a younger generation, experiencing recession for the first time in their lives, who may be strengthened by their current experiences?
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