Many jobs to be affected by credit crunch

Most people are sick of hearing the term ‘global credit crunch‘, but sadly this is s term that many of us have had to get used to over the past year.

Since it made its way over from the United States late in 2007, the credit crunch has wreaked havoc in the financial markets, and has changed the world of banking and mortgages in many ways. There have been many unpleasant consequences of the credit crunch, but one of the effects that have now affected many job sectors is the loss of jobs across the country.

When the global credit crunch first swept the nation there was little doubt that at some point there would be a huge adverse effect on jobs within the financial sector. Banks found that their funding had dried up and lending became far more restricted. With banks and lenders cutting back dramatically on lending levels, both profits and the need to so many employees was affected, and this means that job losses had to occur in various parts of the financial industry. However, this was just the start, and since this time many jobs in a range of industries have been affected.

Many consumers found that they were unable to get a mortgage due to the tighter credit conditions, which had a profound knock on effect on the housing market. House prices have dropped leaving many in negative equity, and the levels of property sales plummeted because many people could not get the finance they needed to purchase a property. As a result many estate agents went bust because of lack of sales, and many estate agency staff members lost their jobs.

It has not just been mortgage lending that has suffered, however, as lenders have cut back on lending in all areas, such as loans, credit cards, and other forms of finance. This has, of course, had a serious effect on consumer spending levels, and with living costs high and little access to finance both consumers and businesses have suffered.

Consumers have really had to cut back on their spending, and this has affected a range of sectors such as manufacturing, services, and retail. With consumers spending less on the High street, many big name retailers have lost a huge amount of profit, and with little or no access to finance many have gone into administration, leaving thousands of people without jobs.

Cutbacks in manufacturing and service industries have also resulted in a huge number of job losses, and reports have indicated that many small businesses are now going bust each week. The Federation of Small Businesses has recently reports that its members are desperate for the government to stop focussing on cutting the base interest rate and start looking at ways to increase access to funding for businesses, many of which are now struggling as credit conditions continue to tighten.

With the recession now in full swing there is little doubt that many more jobs will be lost in a wide range of different sectors, and until the economy gets back on its feet and banks start lending again there is little that can be done other than to endure the recession, which many think is set to be a long and painful one. Many people are worried about their jobs in the current climate, and not doubt this will have a further adverse effect on spending levels, which could damage the economy even further.

Tags: little access, doubt, credit crunch, Credit card, loss, job losses