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Context of 'January 2009: European Union Unemployment Rate at 8.2 Percent in January 2009'

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The Royal Bank of Scotland (RBS) predicts “a full-fledged crash in global stock and credit markets over the next three months as inflation paralyzes the major central banks.” RBS credit strategist Bob Janjuah says, “A very nasty period is soon to be upon us—be prepared.” Bolstering Janjuah’s dire predictions, the RBS bank research team warns that the Wall Street equities index, Standard & Poor’s (S&P) 500 index is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from what the Daily Telegraph describes as “the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world [markets] would amount to one of the worst bear markets over the last century.” Janjuah also warned of the credit crisis in 2007. RBS predicts that Wall Street would rally a little in early July before quickly fizzling out. “Globalization was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point,” Janjuah says. RBS debt market chief Kit Jukes says Europe will not be immune from the problems: “Economic weakness is spreading and the latest data on consumer demand and confidence are dire.” [Daily Telegraph, 6/19/2008]

Entity Tags: Bob Janjuah, Royal Bank of Scotland, Kit Jukes

Timeline Tags: Global Economic Crises

As more EU companies lay off workers, unemployment rises to its highest level in more than two years. The EU jobless rate rises from a revised 8.1 percent in December, and above the 7.3 percent figure in January 2008, according to a report from the BBC. Annualized inflation in the 16-nation area falls to 1.1 percent in January, its lowest in nearly a decade, down from 1.6 percent in the year to December 2008. According to EU officials, the EU has been in recession since September 2008. The latest unemployment and inflation figures increase pressure on the European Central Bank (ECB) to further cut interest rates in an effort to bolster the economy and bring inflation closer to its 2 percent target. The ECB trims rates by half a percentage point to 2 percent in January, the fourth reduction since September, when rates stood at 4.25 percent. “January’s rise in unemployment and further fall in core inflation support our view that ECB interest rates have much further to fall,” says Jennifer McKeown, an analyst at Capital Economics. “The downturn in the labor market, and indeed the wider economy, points to a further fall in core inflation in the coming months.” Unemployment among European Union nations is highest in Spain, at 14.8 percent, and lowest in the Netherlands, at 2.8 percent. [BBC, 2/27/2009]

Entity Tags: Capital Economics, Jennifer McKeown, European Central Bank

Timeline Tags: Global Economic Crises

The European Commission announces that an index of euro-region executive and consumer sentiment has dropped to 65.4 from 67.2. This is a record low and is caused by the global economic crisis. Responding to this and other bad news Jacques Cailloux, chief euro area economist at Royal Bank of Scotland in London, says, “Today’s data has dashed any hope of a tentative stabilization” in the economy. He also predicts a change in policy by the European Central Bank (ECB): “Any sense that the ECB may pause after a March rate cut can be thrown out the window. They will go very low and they will have to start embarking on additional measures.” [Bloomberg, 2/26/2009]

Entity Tags: Royal Bank of Scotland, Jacques Cailloux

Timeline Tags: Global Economic Crises

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