How The Financial Crisis Will Hit The Rest Of Us

We’ve seen enough front page photos of traders slapping their face in horror at the chaos in the markets (as if we care). The question is, when do we get to see Joe The Plumber with hand pressed against forehead in worry? The Independent has an interesting piece on the impact the financial crisis will have on families. Although it has a UK focus, we’re sure much of it can be applied elsewhere. Here are some of the key points:

Jobs
Unemployment is at its highest level for nearly a decade, with a thousand people losing their jobs every day. By next year it is likely to reach three million, which will mean one in 12 people out of work.

Mortgages
Only 15,600 first-time mortgages were approved in August, down 55 per cent from last year, according to the Council of Mortgage Lenders (CML).

Homes
Houses are selling at an average of 9 per cent below asking price, according to the Royal Institute of Chartered Surveyors, and the volume of sales earlier this year was virtually half that of a year ago.

Shopping
Latest figures from the British Retail Consortium (BRC) show sales falling more sharply than at any other time in the past five months. The organisation predicts retail conditions will remain tough until well into next year at least. A BRC spokesman said: “Customers are short of spare cash and reluctant to spend what money they have got, and those conditions show no signs of changing in the near future.”

Petrol
“Falling pump prices are the only bit of light in a very gloomy financial tunnel,” said an AA (British Automobile Association) spokesman. “But eventually these prices are going to go back up again.”

Savings and investments
Falls in stocks and shares hit savings and investments hard. The market will remain volatile until Christmas, say analysts, and is unlikely to start recovering until early next year.

Taxes
As fewer people buy houses and unemployment continues to rise, the Government will be getting less money from taxes. And the £50bn spent on the bailout will have to be recouped from somewhere…

Pensions
Britain’s biggest pension schemes lost £45bn in value since the summer. Experts warn that recovery will not happen overnight.

Meanwhile, on the other side of the pond, New York magazine has an interesting piece on the impact of the chaos on NY taxi drivers.

The Financial Crisis: Now the real problems begin – The Independent