Wednesday, February 11, 2009

Predicted 15 year impact from worst financial downturn in 100 years

In an extraordinary admission about the severity of the economic downturn, the British PM's closest ally predicted that its effects would still be felt 15 years from now. His comments carry added weight because he is a former chief economic adviser to the Treasury.

He added: "The reality is that this is becoming the most serious global recession for, I'm sure, over 100 years, as it will turn out. … These are seismic events that are going to change the political landscape. I think this is a financial crisis more extreme and more serious than that of the 1930s, and we all remember how the politics of that era were shaped by the economy."

He warned that events worldwide were moving at a "speed, pace and ferocity which none of us have seen before" and banks were losing cash on a "scale that nobody believed possible".

The minister stunned his audience at a Labour conference in Yorkshire by forecasting that times could be tougher than in the depression of the 1930s, when male unemployment in some British cities reached 70 per cent.

[The Independent]

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