New jobs at BT and Centrica give ray of hope for UK economy as shocking GDP drop confirms deepest recession in modern history

| July 26, 2012 | 0 Comments

By
Hugo Duncan

16:59 EST, 25 July 2012

|

16:59 EST, 25 July 2012

Thousands of new jobs created by FTSE 100 firms BT and Centrica gave a glimmer of light as grim new figures showed Britain is mired deep in recession.

BT plans to recruit 2,000  engineers and call centre staff this year to support the roll-out of superfast broadband.

Centrica, the parent company of British Gas, said up to 4,000 jobs around the UK will be created thanks to a new tax allowance for shallow water gas fields.


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Stuck in reverse: New data showed that the UK economy is trapped in the deepest recession in modern history

Stuck in reverse: New data showed that the UK economy is trapped in the deepest recession in modern history

The latest numbers show the economy
shrank 0.7 per cent between April and June, the third quarter of decline
in a row and the worst performance since early 2009.

It left Britain trapped in the
longest double-dip recession in modern history and fuelled speculation
the Bank of England will cut interest rates or unleash a further round
of quantitative easing.

Analysts have been left scratching
their heads over the conundrum of why better news in the jobs market is
accompanied by such dismal GDP figures.

Unemployment fell by 65,000 to
2.58million in the three months to May while employment numbers jumped
by 181,000 to 29.35million – the biggest increase for two years.

‘We can think of no reason why
companies would be taking on staff at such an impressive rate if the
economy really was collapsing to the extent that the GDP numbers
suggest,’ said Chris Williamson, chief economist at financial data
company Markit.

The CBI yesterday said factory orders
were stronger than expected in July, offering further hope that the
economy is not in as bad shape as the official figures suggest. But
analysts warned that the underlying picture was one of an economy in
decline – increasing the chances of further QE.

Here’s what other readers have said. Why not add your thoughts,
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So many are not having a landline as the £15 a month is a saving and so many are keeping the gas off and thus the new jobs will be limited in the benefit to the economy.
It takes 18 months for the time delay effect to hit the high street thus these jobs will do nothing fo about 2 years so things will get worse and for more.
So many are using savings and credit cards to keep the household budget going.
We nned a rapid tax cut and the best is a tax credit of a £1000 for all BUT this must be spent within 6 months and this would be a kickstart and a real boost to the economy.
It must not be allowed to be saved as this does nothing and the bust banks have had enough money with Q.E.
This is a tried and tested method and worked very well in Australia.
Come on Gideon go back to folding towels a job you can do.!!!!
Or introduce a wallpaper tax and that will help the family out !!!

I thought that Dave and George were going to improve matters, they are worse now than when Gordon was in charge. Perhaps it is time to let Vince have a go, he cannot do any worse.

Perhaps it is because economists are only capable of looking backwards whereas business needs to look forwards? Stop moaning about the bankers, turn the wrath against economists and analysts who contribute nothing and claim everything…a bit like the unions!

I do worry about the Robert Mugabe approach to economics that our politicians seem intent on following. Quantitive easing, money printing, call it what you like but it will lead to inflation.

The British Chamber of Commerce say things are not in bad shape – theirs is the largest survey of industry – something must be up with the beancounters measures. Everyone should realise that the upturn in employment lags well after the end of a downturn so the unemployment rising is after the 2008-9 recession. Unemployment has not yet had a chance to respond to the current reductions.
Remember also that our largest local market Europe is flat on its face – so no help from that quarter.

This economy is broken, but only because whilst the artificial credit bubble created over the last 15 years is still deflating, the housing bubble is being prevented from deflating and is consequently storing up an inevitable burst. We have to face facts, it growth means that house prices don’t correct, then growth is our arch enemy.

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