Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: http://www.socialistparty.org.uk/issue/221/9178

From The Socialist newspaper, 14 September 2001

World Recession Looms

"VERY HAIRY and very scary" was how one London fund manager described the stock market after the FTSE 100 plunged to its lowest level for three years. "There is panic in the market and about what consumers will do. It is feeding on itself".

Manufacturing in Britain is now in its fourth recession in ten years. According to one UK economist "there is as yet not even a hint of a let-up in the pace of decline". In the past few months, output of telecoms equipment has declined by 50%, of mobile phones by 25% and of PCs by 13%.

A recession will have a devastating affect on the jobs, conditions and lives of working-class people, if we let the bosses try to make us pay for their crisis. At the same time, public- sector workers face the ongoing threat of privatisation.

Marconi epitomises the crisis of overproduction/over capacity manufacturing is facing (see page 3 for further details). In one year its value has plummeted from 30 billion to 800 million. Losses of 5 billion are expected this year - one of the biggest collapses in corporate history. Marconi's creditworthiness is now at junk status.

Only a few months ago that commentators were confidently predicting that Britain would escape any fall-out from the US economy decline. Now it's clear that recession has not only hit manufacturing but is spreading to the service sector.

Last month demand for private-sector services fell for the first time in two and a half years. British Airways announced "sustained job losses ahead" and 20,000 jobs are expected to go in the City as a consequence of the stock market decline.

Banks and insurance companies have been some of the hardest hit by share falls, as fears grow that loans won't be repaid by Marconi and other telecommunication companies.

Consumer spending is still holding up in the retail sector, but for how long? With shares nose-diving and job losses escalating across the economy, a general recession is imminent.

"The markets are now staring into the abyss" wrote the Financial Times. "The bad news is spreading from the US and Japan to Europe and from the manufacturing sector to services".

A bigger than expected rise in unemployment last month sent US shares tumbling. Commentators who were forecasting a recovery just around the corner are now admitting that a recession seems unavoidable.

As a strategist at HSBC bank put it: "The main fear is that deteriorating job prospects will finally start to undermine consumer confidence, which is the only thing standing between the US and recession."

Some optimists hope that further US interest rate cuts will turn the economy around. But, the Federal Reserve Bank has already cut interest rates by seven times this year with little effect. Even if it were able to engineer a small recovery (which seems increasingly unlikely), the underlying problem of excess capacity and falling profits remain, threatening a prolonged and deep recession or even slump.

The rest of the world is in no position to bale the US economy out. Argentina, Mexico and much of Asia are already in recession. Japan is on the brink of recession after ten years of virtually stagnant growth, and output is slowing much faster than expected in Germany and the Euro zone.

According to the Economist: "The most striking aspect of the current slowdown is that it is more widespread than in previous world slumps in 1975, 1982, and 1991".

A world recession will have a radicalising affect on many workers and young people. As well as battles to defend jobs, many will begin to question a system which cannot even guarantee a job or the basics of a decent life - increasing the anti-capitalist mood and the potential for a socialist alternative.

THE COMMITTEE for a Workers' International (CWI) to which the Socialist Party is affiliated, has produced an eleven page statement on the world economy. This analyses in more detail the current economic crisis and its likely effects.

The statement is available at: www.socialistworld.net, or from CWI, PO Box 3688, London, E11 1YE price 50p

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 14 September 2001:

After the carnage in the USA: World Crisis Deepens

World Recession Looms

Action not words to defeat privatisation

Scrap Fees! Restore the Grant!

Growing Crisis in Higher Education

Northern Ireland: Working Class Must Unite Against Sectarianism


 

Home   |   The Socialist 14 September 2001   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

Recession:

triangleSocialist Students launched in USA

triangleThe EU and the economy - Project Fear steps up

US:

triangleVictory! Trump's UK visit cancelled by fear of protests

triangleMovement challenges Iranian regime

triangleThem & Us

triangleWidening wealth gap, increase in poverty...make the fat cats pay

Economy:

triangleAmber warning lights flash on British economy

trianglePowerful picture of the Port Talbot steel workers' struggle

triangleYoung people being strangled by debts

Manufacturing:

triangleNationalise to save jobs at BAE Systems

triangleBoeing bust-up threatens thousands of skilled jobs

Reports and campaigns

Reports and campaigns

17/1/18

Women

Socialist Party women's meeting brings together members to share experiences

17/1/18

Newham

Packed Newham meeting against academies

17/1/18

Liverpool

Lobby pushes Liverpool council to oppose privatisation

17/1/18

Barking

Heating scandal on east London estate

17/1/18

Policing

Undercover policing legal challenge

17/1/18

Woolwich

No to the Woolwich monster block

17/1/18

Union

Workplace news in brief

17/1/18

Union

PCS union 2018 elections - nominate the left slate for a continued fighting leadership

17/1/18

Hackney

Hackney school cleaners strike

17/1/18

RMT

RMT strikes against driver-only operation continue

17/1/18

Yorkshire

Ferrybridge: Workers down tools over unpaid wages

17/1/18

Cuts

We must fight all council cuts!

17/1/18

Socialist Party

Southern Socialist Party conference

16/1/18

Birmingham

Home care workers to strike

12/1/18

Waltham Forest

Outrage against 'monster block' plan

triangleMore Reports and campaigns articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle17 Jan Corbyn's Labour needs 100% anti-cuts strategy and fight for democracy

triangle17 Jan NHS crisis: under pressure from all angles - end cuts and sell-offs!

triangle17 Jan We must fight all council cuts!

triangle16 Jan Home care workers to strike

triangle15 Jan Carillion crisis: Demand action to save jobs and services

triangle12 Jan Outrage against 'monster block' plan

triangle12 Jan Mini-strike wave continues and intensifies

More ...

triangle23 Jan Bristol North Socialist Party: 'You can't have capitalism without racism' - was Malcolm X correct?

triangle23 Jan Cardiff West Socialist Party: How the Poll Tax was beaten

triangle24 Jan Caerphilly Socialist Party: The Carillion scandal

triangle24 Jan Cardiff Central Socialist Party: Carillion collapse - Watershed moment for public services

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Archive

Archives:

January 2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice

V2