Economy appears to be stabilising

Easy to forget that only a couple of months ago it was considered almost insulting to suggest the economy might not perform as badly as many were suggesting. Now, sentiment has shifted the other way. But Labour has to keep focused because even if the outlook has improved we need to improve the prospects for business and fight rising unemployment.

The G8 leaders at the weekend noted that the global economy appeared to be stabilising. That's perhaps not surprising considering the dark days at the beginning of the year, when the financial sector remained in serious trouble and many businesses could not even access day to day credit facilities from banks.

Alistair Darling, the Chancellor of the Exchequer, has had to withstand the shifts in economic sentiment. His Budget forecasts were dismissed as too positive. Now some commentators imply that he may have to revise them upwards. Darling has cautioned against over-optimism.

Former Bank of England MPC member David Blanchflower has echoed the caution and emphasised the potential for unemployment to rise much further this year. It will especially affect young people seeking to enter the jobs market for the first time, he has said on various occasions.

This further underlines my call for a clear message from Labour about jobs. We must do all we can to limit the rise in unemployment, help people obtain new skills, and help those out of work find work. The contrast with the past two recessions under the Conservatives must be clear. Labour will never see unemployment as simply a 'price worth paying'.

Stephen Beer, 15/06/2009

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