All over by Christmas 
Added : 11th June 2009
Tyrone Courtman
Tyrone Courtman, Head of Business Recovery and Insolvency at Regional business advisers Cooper Parry and TMA (UK) Chairman, has dismissed the Chancellor's prediction that the recession will be over by Christmas, as ‘wishful thinking.’
“Unfortunately, it won't be over by this Christmas or the next, and probably not until after the Olympics,” says Mr Courtman.
Mr Courtman says that recovery will be delayed by three interlinked sources of drag: rising unemployment, the continuing lack of liquidity, and higher taxes.
“We're going to see unemployment continue to rise to three or even 3.5 million, which will continue to pull down the real economy,” he says.
“Then we have a major structural issue with the banks, which are going to struggle to regain the capacity to start lending again regardless of the amount of Government money that has been pumped into them.
“And general taxation will have to rise to pay for both the unemployment and the enormous amount of Government borrowing necessary to rescue the banking system. That means less money in the pockets of consumers.”
He adds that growth forecasts of 3.5% disregard the economic background of 12 years of high liquidity, and that a growth trend of 2% is more realistic.
“The Chancellor's prediction seems to ignore the drag these factors will impose on the real economy and is quite simply over-optimistic,” he says.
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