With news springing up that the recession is over and there are signs of recovery in world economies governments need to be very careful not to repeat the problems of the past originally sparked off by 9/11 in the US – businesses need time to recover fully!

I previously wrote about how the attacks of September 11 sparked off a wave of interest rate cuts which began in the US and was followed across the world. This gave way to billions of “Cheap Money” and led to the banks lending to less credit worthy individuals. Once the economies started to regain composure post 9/11 the US government started to put up interest rates and we know where the story led after that with the American economy, the world banks and the collapse of major corporations across the world!

There is talk that with life coming back into the UK economy that the Bank of England could begin to think about putting up interest rates. However, the UK economy and the US economy and others across the world are far from out of the problems caused by past events.

Data is currently being released that unemployment is still rising with it being reported today by the BBC that “UK unemployment rose to 2.261 million in the three months to April, the highest since November 1996“. Government officials need to be considerate of the delayed effect or lag effect on world economies of unemployment.

As the jobless total increases there is less money spent within the economy and businesses suffer still further, and may need to make yet more people redundant and so on.

It is excellent news that we are seeing this positive news coming to the fore and this will in turn give businesses and people more confidence, which will hopefully begin a positive upward spiral.