THE bosses organisation, the CBI, yesterday warned that thousands of manufacturing jobs are about to be slashed by employers seeking to reduce their costs, after the recent major rises in the price of oil and other basic commodities.
The CBI’s latest survey found that in the manufacturing sector orders and output are falling faster than expected.
34% of firms reported a drop in orders in the three months to October and 20% said they rose, making for a balance of minus 14 compared with minus 7 in July.
For good measure the CBI added that despite their hopes of a slight increase, output also fell.
The statement, by CBI deputy director general John Cridland, said that ‘Rising raw material and energy prices have continued to push up costs and hit profits.’
The statement added that this was the background to a big business decision to sharply cut back in investment plans, a decision that will see the rate of job losses and the number of factory closures increase.
The CBI pointed out that 35 per cent of manufacturing firms posted a 35 per cent fall in orders during the quarter to October, while only 12 per cent reported an increase.
To make the matter worse, 30 per cent reported a fall in their export orders.
At the same time as manufacturing industry is sinking further into recession, more and more mortgage holders are facing the banks seeking to repossess their homes.
Mortgage repossession orders during the past three months in England and Wales were up 66% on a year ago.
Repossession orders have been on the increase since early 2004. The figures also show the total number of homeowners being taken to court by lenders pursuing mortgage debt rose 55% in the last three months to nearly 30,000.
The re-possession figures are coinciding with a slowdown in house price inflation.
In July, the Council for Mortgage Lenders (CML) said there were 4,640 homes repossessed during the first half of 2005 compared with 3,070 for the previous six months, largely due to the five interest rate rises between November 2003 and August 2004. The CML is predicting that more than 10,000 homes will be repossessed by the end of the year.
In August this year, UK interest rates were cut by the Bank of England’s Monetary Policy Committee from 4.75% to 4.5%.
While industry and mortgage holders, beset by the rising cost of oil, gas, and electricity, are urging more rate cuts to keep cheap credit and to hold down the price of the pound, the banks are calling for higher interest rates to cut inflation and protect Sterling.
With middle class domestic and credit card debt over £1 trillion the banks feel that they must take steps to get their money back.
A further rise in interest rates will see further cuts in investment and unemployment rising rapidly, along with repossessions as many more mortgages become unrepayable and mortgage holders go into negative equity as house prices fall.
Brown’s economic miracle is being revealed to be another South Sea Bubble.
Workers and their trade unions require a policy for this crisis. This must be that all sackings will be opposed and that bankrupt industries must be nationalised.
Instead of the banks ruining the masses with repossessions and imposed bankruptcies, they must be nationalised and put under workers control. To carry out this programme the Blair government must be brought down and be replaced by a workers government that will carry out socialist policies.