It’s not the the best anniversary to mark but here goes: Today is the fifth anniversary of the financial crisis, the Guardian reminds us.
August 9 2007 was the day the world changed (in the words of ex-Northern Rock CEO Adam Applegarth). That was the moment that the European Central Bank and the US Federal Reserve injected $90bn (£45bn) into the financial markets, after seeing a sudden collapse of confidence.
That coordinated action (the first of many), failed to prevent the credit crunch, the collapse of the Rock, or Lehman Brothers, the world recession or the eurozone crisis.
The news from August 9, 2012, suggests we are not near to being out of the woods yet. Saying that the euro zone economy is in worse shape than it had predicted, the European Central Bank (ECB) has cut its growth forecasts for 2013 to 0.6 percent, instead of a projected 1.0 percent. The ECB also made a plea to countries to reform their economies “swiftly and decisively.”
Other news showed the extent of the challenge: The UK’s trade deficit widened to a record high because of a big drop in exports. Some analysts are pegging the UK’s “dire trade deficit” on euro zone woes. A research note from Japanese bank Nomura has brought up the possibility of a “Brexit,” of the UK leaving the euro zone.
Growth in Asia has also been slowing, with India, whose economy is the third largest in Asia, reporting that industrial production fell for the third time in four months. China’s industrial production and retail sales also fell. Inflation in China has hit a 30-month low and reignited fears of a slowdown in its economy.
In Greece, industrial production rose in June by 0.3 percent. But the unemployment rate is higher than ever, up to 23.1 percent in May (up from 22.6 percent in April), which is more than double the eurozone average (11.1 percent in May). Unemployment for those aged 15 – 24 years is now 54.9 percent. Five years ago, it was 22.8 percent.
Over here in the US, new trade data were more encouraging (certainly if you’re President Barack Obama worrying about elections in November). The US trade deficit decreased by almost 11 percent to $42.9 billion — its smallest level in two and a half years. A decline in oil prices, which lowered fuel bills, accounted for the drop in part. Also, weekly jobless claim numbers were down by 6,000 from a week ago, to 361,000, a sign that the US market may (emphasis on that “may”) be on the mend.
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