More jobs go as recession looms

SOME 450 jobs are set to go at a Marks & Spencer supplier, it emerged at the weekend, adding to the deepening jobs gloom. The news came as one of the country's leading forecasters slashed its predictions for economic growth next year from 1.8 per cent to 0.4 per cent, and warned that the economy was heading to the brink of recession.

Professor Douglas McWilliams, chief executive of the Centre for Economics and Business Research, warned: "This doesn't yet look as bad as 1990-92. But it will feel uncomfortable, with job losses and weakening house prices."

Professor McWilliams is now predicting that the UK economy will narrowly miss a technical recession, with just one quarter of negative gross domestic product growth next year, rather than two. He added that although the economy might avoid recession, the effects of the economic slowdown would be sharply felt, with unemployment set to soar by 300,000 by the year 2000.

Staff at William Baird, clothing supplier to M&S, look set to become the next victims of the slowing economy. The company last week began consulting with unions about 435 job losses, and is expected to shut three factories - a lingerie factory in Gwent, a sweatshirt factory in Cheshire and a casual-wear factory in Caernarfon.

A spokesman for the company blamed the planned closures on weak high street sales, and stressed the decision was not related to any plans by M&S to shift more production overseas.

The expected job losses at William Baird follow a series of recent cuts at a wide range of UK companies. Last week alone, Shell, the oil giant, said 2,000 jobs could go in the UK, Vickers, the defence company, announced 1,100 job losses and British Steel closed a Rotherham mill.

The high pound has been blamed for at least some of the recent job losses in manufacturing, but a slowing domestic economy will make job losses in the service sector increasingly likely, according to economists.

Professor McWilliams forecasts that UK manufacturing output will contract by 2.3 per cent in 1999, while output in the hitherto buoyant service sector will stagnate. What is more, the sharp economic slowdown will "blow a hole" in the Chancellor's financial plans, he said. The CEBR head is predicting a public sector net cash requirement (PSNCR) - the new name for the public sector borrowing requirement - of pounds 24bn in 1993/4. The Chancellor's forecasts for growth are far more optimistic than Professor McWilliams. As a result, the Treasury is looking for a balanced budget by the new millennium.

A separate study by one of the former Treasury "wise men" has found that the pound is still 25 per cent overvalued against the mark, despite recent falls.

Professor Tim Congdon of Lombard Street Research estimates that the "fair value" of the pound - known by economists as purchasing power parity - is DM2.34. The pound closed on Friday at DM2.85. Professor Congdon also estimates sterling to be some 25 per cent overvalued against the dollar.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect