BT slashes 10,000 jobs

• Telecoms giant cuts 6% of global workforce
• Several thousand expected to go in UK
• News of cuts sends shares up 12%

BT is axing 10,000 workers, or 6% of its global workforce, with several thousand expected to go in the UK as the company looks to cut costs and reduce its reliance on contractors in the face of the global economic downturn.

The company, which announced an 11% fall in second quarter profits, said it has already cut 4,000 mostly contractors jobs and a further 6,000 will go by next April. The majority of those job losses will be among BT’s own staff and the axe is expected to fall particularly heavily in the UK.

BT has 160,000 people working for it worldwide, of whom 110,000 are directly employed.

This latest blow to the British economy came just a day after the number of jobless people in the UK hit its highest level since 1997. By the end of September there were 1.825 million people out of work. The claimaint count also rose to 980,900, its highest level since the end of 1997.

News of the job cuts helped to send the company’s shares up 12% in early trading, 13.5p higher at 126p.

Read moreBT slashes 10,000 jobs

Kenneth Clarke warns Britain is on the brink of meltdown

Kenneth Clarke, the former Conservative Chancellor, has warned the economy is on the brink of “meltdown” and unemployment could reach three million.

Mr Clarke, 68, said the British economy is headed for a “catastrophic crisis” that will be “far worse than anything that has occurred in my lifetime”.

“There will be a very serious recession next year,” he said in an interview with Telegraph TV. “I think the big problem in 2009 will be the catastrophic fall in consumer spending demand, spending in shops will get worse.”

Mr Clarke, who as Chancellor of the Exchequer between 1993 and 1997 led Britain’s recovery from Black Wednesday, called for a temporary cut in VAT to boost spending.

Speaking as the Office of National Statistics revealed unemployment has reached an 11-year high of 1.82m, Mr Clarke said the number of jobless could soon reach three million.

Read moreKenneth Clarke warns Britain is on the brink of meltdown

GM Judged Too Big to Fail as Pelosi Embraces Rescue


Vehicles are parked at the Jefferson Chevrolet dealership in Detroit on Nov. 7, 2008. Photographer: Jeff Kowalsky/Bloomberg News

Nov. 12 (Bloomberg) — House Speaker Nancy Pelosi has thrown her support behind the premise that General Motors Corp., the largest U.S. automaker, is too big to be allowed to fail.

In urging Congress to enact emergency aid for the ailing auto industry, Pelosi rejected calls to let GM collapse and sided with the company and its allies in trying to prevent a “devastating” domino effect that would cost millions of jobs.

“Trying to reorganize the auto industry in bankruptcy would be as close to reorganizing the whole U.S. economy as you could get,” said Alan Gover, a bankruptcy lawyer with White & Case LLP in New York. “The vast supply chain involves thousands of businesses, millions of existing jobs and just as many retirees, as well as whole communities and states.”

Passage of an industry bailout plan may keep GM from running out of operating cash by year’s end, which it says may happen without U.S. help. GM is the second-biggest provider of private health-care benefits and was the third-biggest advertiser in this year’s first half.

“It’s truly one of those companies that’s too big to fail, and everybody understands that,” said Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts. “If it does collapse, it could make the recession deeper and longer.”

Behravesh said a GM bankruptcy could send the U.S. jobless rate as high as 9.5 percent, up from a 14-year high of 6.5 percent in October, and produce a recession comparable in length to that of 1980-82.

Read moreGM Judged Too Big to Fail as Pelosi Embraces Rescue

Jobless ranks hit 10 million, most in 25 years; unemployment hits 14-year high


Sunny Yang, left, a masters degree student from Shanghai and employed banker in New York City, speaks with World Bank representative Roberto Amorosino about opportunities for unemployed friends of his during a career fair at Columbia Univeristy Friday, Nov. 7, 2008 in New York. The U.S. unemployment rate bolted to a 14-year high of 6.5 percent in October as another 240,000 jobs were cut, far worse than economists expected and stark proof the economy is deteriorating at an alarmingly rapid pace. (AP Photo/Julie Jacobson)

WASHINGTON (AP) — The nation’s jobless ranks zoomed past 10 million last month, the most in a quarter-century, as piles of pink slips shut factory gates and office doors to 240,000 more Americans with the holidays nearing. Politicians and economists agreed on a painful bottom line: It’s only going to get worse.

The unemployment rate soared to a 14-year high of 6.5 percent, the government said Friday, up from 6.1 percent just a month earlier. And there was more grim news from U.S. automakers: Ford Motor Co. and General Motors Corp., American giants struggling to survive, each reported big losses and figured to be announcing even more job cuts before long.

Regulators, meanwhile, shut down Houston-based Franklin Bank and Security Pacific Bank in Los Angeles on Friday, bringing the number of failures of federally insured banks this year to 19.

The Federal Deposit Insurance Corp. was appointed receiver of Franklin Bank, which had $5.1 billion in assets and $3.7 billion in deposits as of Sept. 30, and of Security Pacific Bank, with $561.1 million in assets and $450.1 million in deposits as of Oct. 17.

Read moreJobless ranks hit 10 million, most in 25 years; unemployment hits 14-year high

Stunned Icelanders Struggle After Economy’s Fall

A woman waited last month for a bank to open in Reykjavik, where everyone has been affected by the financial failure.

REYKJAVIK, Iceland – The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window. Another said, “It feels like you’ve been put in a prison, and you don’t know what you did wrong.”

This country, as modern and sophisticated as it is geographically isolated, still seems to be in shock. But if the events of last month – the failure of Iceland’s banks; the plummeting of its currency; the first wave of layoffs; the loss of reputation abroad – felt like a bad dream, Iceland has now awakened to find that it is all coming true.

It is not as if Reykjavik, where about two-thirds of the country’s 300,000 people live, is filled with bread lines or homeless shanties or looters smashing store windows. But this city, until recently the center of one of the world’s fastest economic booms, is now the unhappy site of one of its great crashes. It is impossible to meet anyone here who has not been profoundly affected by the financial crisis.

Overnight, people lost their savings. Prices are soaring. Once-crowded restaurants are almost empty. Banks are rationing foreign currency, and companies are finding it dauntingly difficult to do business abroad. Inflation is at 16 percent and rising. People have stopped traveling overseas. The local currency, the krona, was 65 to the dollar a year ago; now it is 130. Companies are slashing salaries, reducing workers’ hours and, in some instances, embarking on mass layoffs.

“No country has ever crashed as quickly and as badly in peacetime,” said Jon Danielsson, an economist with the London School of Economics.

Read moreStunned Icelanders Struggle After Economy’s Fall

Philadelphia to close libraries, pools, cut jobs

Mayor says city among many facing large budget shortfalls in bad economy

PHILADELPHIA – The city will close libraries and swimming pools, suspend planned tax reductions, cut more than 800 jobs and trim salaries for some administrators in order to weather “an economic storm” that could leave the city with a $1 billion shortfall, Mayor Michael Nutter said Thursday.

Nutter outlined the drastic budget cuts in a live, 10-minute televised address – a rarity that represented an attempt to convey the dire nature of the city’s financial situation.

“The city must prepare for the worst,” Nutter said. “Painful program and service cuts are necessary.”

The city is facing a deficit of $108 million this year, and the shortfall could grow to more than $1 billion by 2013, Nutter said.

Read morePhiladelphia to close libraries, pools, cut jobs

Jobs lost in 2008: 1.2 million

Payrolls shrink by 240,000 in October, 10th straight month of cuts. Unemployment soars to 6.5%

chart_job_losses2.03.jpg

NEW YORK (CNNMoney.com) — The government reported more grim news about the economy Friday, saying employers cut 240,000 jobs in October – bringing the year’s total job losses to nearly 1.2 million.

According to the Labor Department’s monthly jobs report, the unemployment rate rose to 6.5% from 6.1% in September and higher than economists’ forecast of 6.3%. It was the highest unemployment rate since March 1994.

“There is so much bad in this report that it is hard to find any silver lining,” said Morgan Keegan analyst Kevin Giddis.

Economists surveyed by Briefing.com had forecast a loss of 200,000 jobs in the month. October’s monthly job loss total was less than September’s revised loss of 284,000. Payroll cuts in August were revised up to 127,000, which means more than half of this year’s job losses have occurred in the last three months.

September had the largest monthly job loss total since November 2001, the last month of the previous recession and just two months after the Sept. 11 terrorist attacks.

With 1,179,000 cuts, the economy has lost more than a million jobs in a year for the first time since 2001 – the last time the economy was in a recession. With most economic indicators signaling even more difficult times ahead, job losses will likely deepen and continue through at least the first half of 2009.

Read moreJobs lost in 2008: 1.2 million

Citigroup, Goldman Said to Begin Eliminating More Than 12000 Jobs

Nov. 6 (Bloomberg) — Citigroup Inc. and Goldman Sachs Group Inc., faced with a weakening economy and the prospect of mounting losses, began firing workers as part of the firms’ plans to cut more than 12,000 jobs, people with knowledge of the matter said.

Goldman, which converted last month from the biggest U.S. securities firm into a commercial bank, yesterday began telling about 3,200 employees, or 10 percent of its workforce, they were out of a job, according to one of the people who declined to be identified because the decisions were confidential.

Citigroup has been notifying staff this week who are affected by the bank’s plan to discard 9,100 positions over the next 12 months, or about 2.6 percent of its headcount, another person said.

The ousted workers add to the swelling ranks of Wall Street’s unemployed, their lives upended by the credit crisis. Both New York-based firms have already cut staff, and are among the banks and brokerages worldwide that have shed almost 150,000 jobs since the subprime mortgage market collapsed last year. Led by Chief Executive Officer Lloyd Blankfein, Goldman said in April it would fire more after culling about 1,500 underperformers. Vikram Pandit, Citigroup’s CEO, shed 12,900 over the past year.

“We haven’t hit bottom yet,” said Henry Higdon, managing partner at Higdon Partners LLC, a New York-based search firm specializing in financial services. “They have to adjust the size of their businesses to the realities, not only today, but what it’s going to look like in the next two or three years.”

Read moreCitigroup, Goldman Said to Begin Eliminating More Than 12000 Jobs

U.S. Stocks Post Biggest Post-Election Drop on Economic Concern


Traders work on the floor of the New York Stock Exchange in New York, Nov. 5, 2008. Photographer: Ramin Talaie/Bloomberg News

Nov. 5 (Bloomberg) — The stock market posted its biggest plunge following a presidential election as reports on jobs and service industries stoked concern the economy will worsen even as President-elect Barack Obama tries to stimulate growth.

Citigroup Inc. tumbled 14 percent and Bank of America Corp. lost 11 percent as the Standard & Poor’s 500 Index and Dow Jones Industrial Average sank more than 5 percent. Nucor Corp., the largest U.S.-based steel producer, slid 10 percent after bigger rival ArcelorMittal doubled production cuts amid slowing demand. Boeing Co., the world’s second-largest commercial planemaker, lost 6.9 percent after UBS AG forecast a 3 percent drop in global air traffic next year.

Read moreU.S. Stocks Post Biggest Post-Election Drop on Economic Concern

US motor industry: The great breakdown

Such is the severity of the downturn in the global car industry that US manufacturers are now pushing for their own state bailout.

Why stop at the banks? Now governments around the world are pouring taxpayer money in to bail out loss-making financial institutions, it is getting harder to argue against subsidies, loans, guarantees and other forms of government assistance for other industries, too – particularly since the economic pain is now being felt far from Wall Street.

Which is why Rick Wagoner, chief executive of General Motors, the largest US carmaker, packed his suitcase for Washington and headed to the capital again this week. He is leading a lobbying push aimed at tapping taxpayers and staving off the bankruptcy of the loss-making company. GM’s coffers are being depleted at a rate of $1bn a month, and will run dry by the end of next summer. Little wonder its shares have touched levels not seen since it emerged from the Great Depression.

GM – owner of the Vauxhall brand and Chevrolet, amongst others – is in the throes of merger talks with its smaller rival Chrysler, which is also haemorrhaging cash. The hope is a merger will save money, allowing them to close more factories and cut more jobs. The trouble is, things are so desperate they don’t have the cash to write the redundancy cheques. They are asking for up to $10bn in low-cost loans to tide them over.

So here we are, on the brink of Bail-out II: Detroit.

Read moreUS motor industry: The great breakdown

Goldman to Cut 10% of Jobs as Downsizing Wave Grows


The Goldman Sachs Tower dominates the Jersey City, N.J. skyline.

Goldman Sachs Group Inc. is preparing to cut about 10% of its 32,500 employees, according to people familiar with the matter, a sign of deepening job losses on Wall Street.

The cuts, expected throughout the New York-based company, underscore how much even the mightiest securities firms have been shaken by the 16-month credit crisis. Despite avoiding the catastrophic mistakes that sank Bear Stearns Cos. and Lehman Brothers Holdings Inc., Goldman is suffering from the drought in investment banking and trading.

Read moreGoldman to Cut 10% of Jobs as Downsizing Wave Grows

Yahoo Reports Profit Drop, Plans to Cut 10% of Jobs

Oct. 21 (Bloomberg) — Yahoo! Inc., the Internet company that rejected a takeover offer from Microsoft Corp., reported a 64 percent drop in profit and announced plans to cut at least 10 percent of its staff after advertising spending slowed.

Third-quarter net income fell to $54.3 million, or 4 cents a share, from $151.3 million, or 11 cents, a year earlier, Yahoo said today in a statement. Sales, excluding fees passed on to partner sites, rose 3 percent to $1.33 billion.

Read moreYahoo Reports Profit Drop, Plans to Cut 10% of Jobs

Merrill Chief Thain Expects Thousands of Job Cuts

Oct. 20 (Bloomberg) — Merrill Lynch & Co. Chief Executive Officer John Thain said he expects “thousands” of job losses from the bank’s $50 billion takeover by Bank of America Corp.

Most of the cuts will fall in information technology, operations and “corporate functions,” Thain, 53, said in a Bloomberg Television interview in Dubai today. Jobs in the fixed income and commodities divisions won’t be eliminated after the deal, he said.

“We haven’t mapped it out in terms of actual number of people, but we are committed to saving $7 billion across the combined platforms, and that will be a challenge,” Thain said. “Between our two companies it will be clearly thousands of jobs.”

Read moreMerrill Chief Thain Expects Thousands of Job Cuts

Unemployment to hit three million within a year as it rises at fastest rate for 17 years


Cuts: Unemployment rose by 164,000 in the three months up to August and could hit two million by Christmas as the credit crunch hits home

Unemployment could hit three million by the end of next year to levels not seen since John Major was in power as Britain battles recession, it was warned today.

The rate is already at its highest level for almost a decade after soaring more than 10 per cent in the past three months to 1.79million.

In its biggest rise since 1991, 164,000 people lost their jobs in June, July and August. Last month alone, more than 31,000 people signed up to claim the dole.

Vicky Redwood from Capital Economics believes this is just the tip of the iceberg and that unemployment could eventually hit three million as the slowdown deepens.

‘With the UK heading into recession, we expect this measure to rise by a total of 1.5 million to around three million or nine percent by the end of 2010,’ she said.

Read moreUnemployment to hit three million within a year as it rises at fastest rate for 17 years

Roubini: US Will Suffer Worst Recession in 40 Years

Oct. 14 (Bloomberg) — Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, driving the stock market lower after it rallied the most in seven decades yesterday.

“There are significant downside risks still to the market and the economy,” Roubini, 50, a New York University professor of economics, said in an interview with Bloomberg Television. “We’re going to be surprised by the severity of the recession and the severity of the financial losses.”

The economist said the recession will last 18 to 24 months, pushing unemployment to 9 percent, and already depressed home prices will fall another 15 percent. The U.S. government will need to double its purchase of bank stakes and force lenders to eliminate dividends to save them from bankruptcy, Roubini added. Treasury Secretary Henry Paulson said today he plans to use $250 billion of taxpayer funds to purchase equity in thousands of financial firms to halt a credit freeze that threatened to drive companies into bankruptcy and eliminate jobs.

``This will be the first round of recapitalization of the banks,” Roubini said. “The government has to decide to intervene much more directly in the provision of credit and the management of these companies.”

Read moreRoubini: US Will Suffer Worst Recession in 40 Years

GM to hasten factory closings

Wis. plant, Grand Rapids affected


General Motors announced Monday that it will idle its Janesville, Wis., SUV factory on Dec. 23.
(2005 photo by Janesville Gazette via AP)

General Motors Corp. announced Monday that it will close its Grand Rapids stamping plant in December 2009 and accelerate the closing of its Janesville, Wis., assembly plant by more than a year to Dec. 23 of this year.

The plant closing announcements come just a little more than a week after the automaker said it would advance the closure of its Moraine, Ohio, assembly plant.

All three plants make parts for or assemble large and midsize trucks, which have seen particularly large drop-offs in sales this year with the worsening economy and high gas prices.

Monday’s announcements are part of GM’s plans to accelerate plant actions to save money in the face of the worst auto market in more than a decade.

GM has not said whether it will close other plants early or announce new closure actions.

GM started the day Monday by telling 1,300 workers in Janesville that it would close the plant Dec. 23, more than a year before the company had planned.

Read moreGM to hasten factory closings

Germany’s Car Industry Crashes

For years, Germany Inc.’s best promotional vehicles have been the world-class luxury cars the country produces. Shiny Audi, BMW and Mercedes-Benz cars are like mobile billboards for excellence, from New York to Moscow, Buenos Aires to Shanghai.

But as the global financial crisis begins to take its toll on the real economy, Germany’s export machine has hit a wall. German exports fell 2.5% in August, the sharpest fall since 2003, as consumers and companies around the world cancel orders for everything from high-end industrial equipment to chemicals.

The car industry, still Germany’s biggest employer, is the worst hit. High gas prices in key markets such as the U.S. have slowed sales for months. Some consumers have been waiting for more fuel-efficient models, while many more are now delaying new purchases because of uncertainty over their jobs. Thanks to the credit crunch, even people who want to buy are finding finance has dried up.

All that spells trouble for the likes of BMW, Mercedes Benz, Porsche, Volkswagen, Ford Europe and General Motors’ Europe arm, Opel. Ferdinand Dudenhoffer, a respected industry analyst, predicts that the number of new German cars delivered to customers in 2008 will fall by at least 100,000 units to around 3.1 million, and will likely slip below three million next year. As a result, he says, German car companies will have to cut up to 20,000 jobs over the coming year.

Read moreGermany’s Car Industry Crashes

With Spotlight on Pirates, Somalis on Land Waste Away in the Shadows


Above, a severely malnourished baby lay unresponsive on Thursday as the mother and father sat nearby in a feeding center in Afgooye, Somalia.

AFGOOYE, Somalia – Just step into a feeding center here, and the sense of hopelessness is overwhelming.

Dozens of women sit with listless babies in their laps, snapping their fingers, trying to get a flicker of life out of their dying children.

Little eyes close. Wizened 1-year-olds struggle to breathe. This is the place where help is supposed to be on its way. But the nurses in the filthy smocks are besieged. From the doorway, you can see the future of Somalia fading away.

While the audacity of a band of Somali pirates who hijacked a ship full of weapons has grabbed the world’s attention, it is the slow-burn suffering of millions of Somalis that seems to go almost unnoticed.

The suffering is not new. Or especially surprising. This country on the edge of Africa has been slowly, but inexorably, sliding toward an abyss for the past year and a half – or, some would argue, for the past 17. United Nations officials have called Somalia “the forgotten crisis.”

Read moreWith Spotlight on Pirates, Somalis on Land Waste Away in the Shadows

What is to be Done? A Possible Solution to the Economic Crisis

By PAUL CRAIG ROBERTS

Readers have been pressing for a solution to the financial crisis. But first it is necessary to understand the problem. Here is the problem as I see it. If my diagnosis is correct, the solution below might be appropriate.

Let’s begin with the fact that the financial crisis is more or less worldwide. The mechanism that spread the American-made financial crisis abroad was the massive US trade deficit. Every year the countries with which the US has trade deficits end up in the aggregate with hundreds of billions of dollars.

Countries don’t put these dollars in a mattress. They invest them. They buy up US companies, real estate, and toll roads. They also purchase US financial assets. They finance the US government budget deficit by purchasing Treasury bonds and bills. They help to finance the US mortgage market by purchasing Fannie Mae and Freddie Mac bonds. They buy financial instruments, such as mortgage-backed securities and other derivatives, from US investment banks, and that is how the US financial crisis was spread abroad. If the US current account was close to balance, the contagion would have lacked a mechanism by which to spread.

Read moreWhat is to be Done? A Possible Solution to the Economic Crisis

Economic chaos creates surge in homelessness

CAMBRIDGE, Massachusetts (AP) — The number of homeless families in Massachusetts has surged — a spike that has overwhelmed the state’s shelter capacity and forced it to again place homeless families in motels.


The number of homeless families living in Massachusetts motels skyrocketed in September 2008.

Driving the increase is the sour economy, rising energy costs, escalating unemployment and shortage of affordable housing. For the first time, the state is tracking how many families are winding up homeless due to foreclosures.

“You’re seeing a perfect storm,” said Robyn Frost, executive director of the Massachusetts Coalition for the Homeless.

Read moreEconomic chaos creates surge in homelessness

U.S. loses 159,000 jobs in September, worst one-month drop in five years

WASHINGTON — As the presidential election season nears its climax, there is growing evidence that the country is slipping into the deepest recession in decades.

The latest marker came Friday, when the government reported that employers shed 159,000 jobs in September, far more than expected. That was the worst one-month drop in more than five years and brings to 760,000 the number of jobs that have disappeared this year.

Economists say the accelerating pace of job losses, combined with the most severe credit crisis since the Great Depression, make it increasingly likely that the government bureau that determines business cycles will eventually stamp “recession” on this one.

“This should remove any lingering doubts that the economy is in a recession,” said Dean Baker, co-director of the Center for Economic and Policy Research. “The rate of job loss is accelerating and the unemployment rate is virtually certain to cross 7% early in 2009.”

Read moreU.S. loses 159,000 jobs in September, worst one-month drop in five years

Democrats and Republicans alike sceptical of Bush bailout plan


Federal Reserve chairman Ben Bernanke folds his hands while testifying with US Treasury secretary Henry Paulson before the Senate banking committee on Tuesday. Photograph: Charles Dharapak/AP

The proposed $700bn bailout of US financial markets faced harsh criticism in Congress today, with liberals and conservatives both sceptical that granting the Bush administration power to buy up risky mortgages would avert further economic crisis.

Yet despite the wariness from the Senate banking committee, where Henry Paulson and Ben Bernanke appeared today, the financial rescue seems poised to win approval by next week at the latest.

“This is not something I wanted to ask for,” the US treasury secretary said, assuring senators that “I feel your frustrations” and “I’m angry” at the prospect of Wall Street firms getting saved by the government.

But Paulson and Bernanke did ask for broad latitude to decide which toxic assets would win a purchase by the government. Senators of both parties did not attempt to hide their anger at the request, citing the Bush administration’s previous assurances of market stability.

“We have been given no credible assurances that this plan will work,” Richard Shelby, the senior Republican on the banking panel, said. “Congress does not have time to determine if there are better alternatives.”

The committee’s Democratic chairman, Chris Dodd, questioned Paulson’s request for immunity from any legal or government review of his actions during the bailout process.

“After reading this proposal, I can only conclude that it is not just our economy that is at risk,” Dodd told the treasury secretary, “but our constitution as well.”

Read moreDemocrats and Republicans alike sceptical of Bush bailout plan

Jobless set to top two million as the UK economy heads for meltdown


A JobCentre office

The true scale of the jobs disaster facing Britain is revealed today as experts issue dire warnings that up to half a million workers will lose their jobs over the next two years, as companies cut costs and scale back investment plans to survive the economic downturn.

Official figures are widely expected to reveal this week that the number of people out of work and claiming benefits increased for a seventh successive month in August.

Finance companies based in London’s Square Mile have already laid off thousands of workers since the US mortgage crisis unleashed chaos in the world’s markets last summer; and the 5,000 UK-based staff at crisis-hit investment bank Lehman Brothers are awaiting news this weekend about how many of them will be made redundant.

Read moreJobless set to top two million as the UK economy heads for meltdown

Tens of thousands to be laid off every week as UK falls into recession

MPC member warns of ‘horrible surprise’
Gloomy assessment sends London shares falling

Tens of thousands of people could be laid off every week in the run-up to Christmas as the UK economy falls into recession, David Blanchflower of the Bank of England’s monetary policy committee warned today.

Blanchflower told MPs to expect “a large increase in unemployment”, and warned that a “horrible surprise” could be just around the corner. The gloomy assessment sent shares in London falling, and also weakened sterling yet further against the dollar.

Blanchflower, who has repeatedly tried and failed in recent months to persuade the MPC to cut interest rates, predicted that the unemployment count will rise by 60,000 a month for several months in a row, probably starting in October.

“I believe we will see a deeper economic decline than other people think,” Blanchflower told the Treasury select committee, ruling out the possibility that the UK GDP will not shrink.

Read moreTens of thousands to be laid off every week as UK falls into recession