'Government is responsible for credit crunch'

Friday, 5 June 2009 12:00 AM

By politics.co.uk staff

The government is to blame for causing the credit crunch by profiting from a largely unregulated financial system, a new survey has revealed.

The survey found that 82 per cent of people hold the government and the regulators as responsible for the economic downturn as the banking industry.

Another 64 per cent of respondents felt the fundamental lack of regulation was symptomatic of political greed and political decisions were often made as to benefit the politicians rather than the public.

This finding clearly reflects the public's mood following the expenses scandal.

"There is already a good deal of debate over the veracity of the Treasury's macro-economic forecasts and the implied debt position that these assume," says Neil Hendry, director of consulting for consumer & financial services at Datamonitor.

The recession & recovery research programme by market analyst Datamonitor studied the effects of the credit crisis on consumers and business in 19 countries.

In the UK, 58 per cent of respondents claimed they were poorer as a result of the recession, with almost a quarter blaming this decline on a loss of salary.

Market conditions were still dire and did not seem to be improving, 77 per cent of the population believed despite the biggest wave of redundancies being over.

Almost half of respondents in employment were worried about their job security. Unemployment figures are expected to rise by 250, 000 in July alone as 600,000 students will be entering the market.

David Blanchflower of the Bank of England's monetary policy committee's predicted this week that 100,000 people each month will add to the numbers of people out of work, up to the end of 2010.

"Whoever wins the next election has to deal with the fundamental fact that the UK consumer remains downbeat about the economy and their personal financial positions," Mr Hendry said.

"They say a week is a long time in politics - it therefore remains to be seen where British political sentiment and blame will lie for the economic situation if the next government can not create sustainable employment and with it consumer confidence in a very short space of time."
The online survey was conducted on May 30th and 31st and was based on a sample of 300 respondents from the UK.

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