Lessons from Economic Crisis Devon in Recession Ben Neild Assistant Director, SLIM 29 th November 2010

Dec 2007Stock market sees biggest fall since 2001 Qtr Mortgage products (e.g. 110% offers) disappear UK Interest rate cut by 0.25% to 5.0% Economy still growing (though we didn’t know that at time) Qtr RBS tries to raise £12bn & fails as share price falls. House prices fall, Persimmon Builders cut staff. Qtr HBOS collapses, Lehman goes Bankrupt, Federal Reserve finds 85bn to rescue AIG, house prices collapse, liquidity vanishes etc. Confidence vanishes. Things that aren’t essential stop. Credit dependent companies fold. ‘Recession’ or ‘Crash’ Timing matters

UK GDP Source: ONS

Comparisons between recessions Source: NIESR Worse than the ‘Great Depression’

GDP in the economic crisis Source: OECD International Comparisons

Public Spending Source: OECD Annual Government borrowing, % GDP Italy UK Spain Total National Debt, % GDP

Business Confidence Source: ICAEW Purchasing Managers Index Q? How would you describe your confidence in the economic prospects facing your organisation over the next 12 months, compared to the previous months? -100 = 100% feel ‘much less’ confident. -50% could be achieved if 100% felt ‘slightly less confident’ etc.

Redundancies Source: LFS Devon – Quarterly notified to JC+ UK – LFS Redundancies per 1,000 people

Employment Rates Source: LFS

Unemployment in the economic crisis Source: LFS / OECD

LFS & Claimant Count Unemployment, SW Source: LFS % Working age population in Employment

Part-time Working Source: OECD % Working age population Men Women

Youth / Adult Unemployment Source: JC+ 4 Devon ESBs, Oct 2007 – Oct 2008, Claimant Count

% GDP Spent on Public Employment Services, 2008 Source: OECD

% GDP Spent on other ‘Active Measures’, 2008 Source: OECD

Unemployment benefits Source: % of previous earnings, single person without children, 2007

Total cost of ‘Passive Measures’ Source: LFS % of GDP, 2008