2008 Financial Crisis--- Impact on Unemployment Rate

2008 financial crisis gave rise UK's unemployment rate to increased from 5.1% (2008) to 8.4% (2011). Nevertheless many economists have predicted that UK's unemployment rate would climb up to 9% in the end of 2012. The following figure reveals the rates' changing in recent years.
                     Figure 3: Unemployment rate- Seasonally adjusted data

                                Notes: Data collect from eurostate

As we can see from the figure 3 above, the unemployment rate was floating back and forth in a range between 4.3% to 6% from 2000 to 2008. Right from the spring of 2008, it went straight up to 8% just within one year and deteriorated to 8.4% till 2011 where still didn't show any obvious improvement until end of the same year. According to Financial Times statistics, unemployed staff in the whole country rose from 48,000 to 2.7 million in the end of last year, also a biggest jump since 1992. "These numbers are truly horrendous and much worse than I had feared," said David Blanchflower, a labour market expert and member of the Bank of England's monetary policy committee.

'British unemployment today posted its biggest rise since the country's last recession 17 years ago as the financial crisis filtered through to the jobs market.' (Julia Kollewe and Ashley Seager, 2008) Last world-wide economic crisis broke out in 1992 and the globe market was extremely weak at that time. The similar situation happened after 2008 financial crisis, large number of graduates were facing a much tougher and ever most competitive recuitment market, not to mention to find desirable jobs. Thousands of jobs are being lost in even top firms, where banks have merged or collapsed or nationalised, and on the high street, where growing numbers of retailers are going bust,  left the remaining staffs to complete the workload of three employees on one person. There were not enough job plces to fill up job seekers. Many young people prefer to stay at home and rely on claiming jobless benefits rathern than giving another try which would apparently increase the burden of government deficit. Another trend is some students decide to continue study master courses during economic downturn series in order to give more room for securing jobs. As the vacancies number shrink, it will be more and more difficult to get people back into work. It will not simply be a case of retraining the unemployed group of people if there are not enough jobs for them to return to.


The figure 4 below shows the number of people who are unemployed from 1992 to 2011.
               Figure 4

It reveals that UK's unemployment rate in 2011 almost equal to the figure in 1992's recession. Some economists are suggesting the government to deal with this issue by imitating the rescue solutions in 1992 (drop UK's foreign exchange rate) to stimulate UK's financial market.