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The UK faces the risk of staying in recession until the year 2010, a new report published by the IMF claims. Gloomy news for sure, as Britain tries to get back on track after a disastrous start to the new year. The IMF report states that Britain, is quite possibly the only major country will continue to have a shrinking economy all the way into 2010.
The news certainly bode bad news for the Labour party's bid for re-election, but as the report states, their political action may well bear a large responsibility for the prolonged downturn of the economy. Britain is forecasted to be the only major country still in recession by 2010, as other European countries as well as the US are expected to get out of negative growth figures in early 2010, after a slow recuperation period during 2009.
With unemployment rates now hitting 2 million people, criticism of Gordon Brown and his failure to address the crisis is growing on the street. The failing of giant high street companies such as Woolworth are a large part of the growing number of unemployed. The company employed 30,000 people before their fall. But other businesses have reported major layoffs such as Barclay's, Jaguar Land Rover and Land of Leather. Will other large companies be able to weather the storm, or will they buckle as well? Time will tell, who had foresight enough to tighten up when needed, or who will go hat in hand to prime minister Gordon Brown, who doesn't quite have a good explanation for why taxpayers must continue to take on debts on behalf of the banks.
With this gloomy news, smaller businesses are most likely going to be hit the hardest as credit lines and consumer demand runs out. It is quite possible to imagine several more bankruptcies in the coming months if UK companies are not able to adapt to the new situation of the credit crunch and falling demand.
On the plus side, companies who are able to make the necessary adjustments and are fundamentally sound, will find that hiring qualified workers to be much easier than during the last boom years. Reports now show that for every vacant position made public, there are now 10 skilled professionals available for that job. No doubt, the recession will put a strain on many a business in the next 12 months, but those with extra foresight and sound management will be able to grab additional market shares.
Cuts and cost saving will still be paramount for surviving though and many companies will look to drastically reduce costs without letting go of their talented and necessary workforce. This will most likely mean a reduction in costs in production, as well as optimising procedures to cut overhead spending.
Companies with large costs associated with printing will perhaps have to look at new venues to buy from. Business cards will perhaps not be gold rimmed anymore for the common employee, but instead be delivered by an online printer for a lower cost. Small things matter these days and the time of overindulgence and unnecessary luxury is over for the majority of UK businesses.