The Covid and the post-Covid era haven’t been friendly to the world economy, especially in the UK.
According to ONS labor market data of September 2022, open vacancies were declining at a rate not seen since 2020, with the employment rate reaching 3.6%, the lowest percentage since 1974. Experts have cautioned that this could signal the end of the post-lockdown job boom.
July showed the lowest growth in the number of regular job openings in 17 months.
According to KPMG, recruiters are growing increasingly cautious about employing new employees.
According to the firm, continued skills shortages, a reduction in foreign workers, and applicant reluctance to change positions have contributed to a tighter supply of qualified staff.
The halting of the hiring surge that followed the pandemic comes as the Bank of England warns that the UK may enter a recession in the fourth quarter of this year. To cool rising prices, the bank boosted interest rates from 1.25% to 1.75%.
According to KPMG and the Recruiting and Employment Confederation’s jobs report, rising operating expenses and uncertainty about the UK’s economic prospects are causing some employers to halt recruitment, at least for permanent positions.
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What is a recession? A recession is defined as two successive quarters of GDP contraction. GDP is a popular indicator of a country’s economic size. It is calculated in sterling in the United Kingdom and estimates the value of products and services generated through time.
Why is the UK in a recession?
Because of increasing oil prices, the situation in Ukraine, Brexit, and the inflationary effect of sectors reopening following Covid lockdowns, the UK is currently regarded to be in a recession.
In May, the National Institute of Economic and Social Research anticipated that approximately 1.5 million households would struggle to pay their food and energy bills during the cost of living crisis.
According to the research, the Bank of England will have to hike interest rates to two and a half percent next year to combat rising inflation.
What Effect Does a Recession Have on the Job Market?
During a recession, you may lose your work as unemployment rises. Not only are you more likely to lose your current job, but it also gets much more challenging to locate a job replacement as more individuals lose their jobs.
People who remain in their positions may experience pay and benefit decreases and difficulty negotiating future pay hikes.
During a recession, investments in stocks, bonds, real estate, and other assets can lose money, lowering your savings and disturbing your retirement plans. Worse, you may lose your home and other possessions if you can’t pay your payments because of a job loss.
During a recession, business owners generate fewer sales and may even be forced to declare bankruptcy. The government attempts to assist enterprises during these difficult times, but keeping everyone viable during a severe slump is challenging.
How Can You Save Yourself?
So, how does the impending economic downturn affect you?
During a recession, businesses search for any means to cut costs, including terminating long-term staff. Recessions also strain job seekers, who will face fewer job openings and more competition as they enter the labor market.
When your career is potentially jeopardized, it’s critical to be prepared for the worst. Just as you would weather-proof your home before a storm, you can take these pre-emptive precautions to ensure that the high economic winds ahead do not blow your career off track.
In a volatile economy where you could be hired one day and fired the next, it’s critical to always have an up-to-date CV on hand. Writing a meaningful, appealing CV is a demanding undertaking that does not usually come immediately.
For such an important task, it’s worth looking into CV writing services.
The first step is to speak with your manager about areas where you can improve and your future career path within the organization.
You might also use this occasion to express your gratitude for the opportunity to work for the company and your intention to remain a long-term, valued employee. Demonstrate to management that you have what it takes to keep your nose to the grindstone during trying times.
Also, suppose your firm provides additional training or certifications. In that case, you should consider enrolling in those to obtain essential abilities you can bring to your job and help diversify your skill set.
Finally, if you haven’t already, attempt to develop friends with your immediate colleagues.
What is the current situation?
According to figures issued on October 12 by the Office for National Statistics, the British economy shrunk by 0.3% in August.
If growth in November were also negative, the UK would be in a recession. According to Fitch, the economy will enter a recession in the fourth quarter of this year, with output falling by 0.2% next year.
In August, output in industries depending on consumer discretionary expenditure declined by 1.8% monthly, demonstrating how inflation reduces households’ real income.
The Bank of England boosted interest rates by 0.5 percentage points to 2.25 percent in August, and Fitch expected they would reach 4.25 percent by December.
According to the Bank of England’s Monetary Policy Report, the economy is entering its first recession in more than a decade. It would be the most significant annual contraction (down in spending) since 1706.
Overall, estimations indicate that the impact of Post-COVID-19 might decrease the economy by a stunning 14% by 2020.
Chancellor of the Exchequer Rishi Sunak says, ‘It is now quite likely that the UK economy will experience a big recession this year, and we are already in the midst of it as we speak.’