A spring in its step for the UK economy - City Comment
10 April 2014
This week’s Q1 statements from Hays and Robert Walters fully support the numerous economic confidence and activity surveys published this year, which point to rising confidence, broadening economic recovery and increased hiring intentions.
Thu, 10 Apr 2014 | Sue Dodd, director, Agile IntelligenceThis week’s Q1 statements from Hays and Robert Walters fully support the findings of numerous economic confidence and activity surveys published this year, which point to rising confidence, broadening economic recovery and increased hiring intentions.
Adding to this is a wealth of economic data that continues to provide good evidence of a recovery in the UK despite continuing disturbing levels of public borrowings and consumer debt.
Also, despite his borrowings challenge, the chancellor managed to find a little headroom in his recent Budget to assist businesses through the National Insurance allowance, increased export credit and a range of other measures designed just to encourage a little more investment across the widest breadth of companies.
Nearly all indicators are pointing in the right direction to enhance economic and labour market fortunes and the Bank of England has repeatedly stated that it will not be rushed into interest rate increases – a policy helped by falling inflation, now well below target, and no serious signs as yet that the economy is over-heating.
So is all rosy in the garden for both chancellor and the Bank’s governor? Well, almost. The elephant in the room is, of course, house prices – that familiar British problem which relates to high levels of home ownership, mortgage awards, property ladders and gazumping, and their wide disparity across the UK. Once again London and the South-East, followed by certain other large cities, are seeing prices lift off yet other areas, where prosperity is less certain, remain truly depressed.
This is nothing new – it happens cyclically – the question is will the current governor act differently than his predecessors to stem any potential house price bubble? On form so far we would have to think so – differently yes but would he act prematurely, given the stakes on economic recovery? Perhaps not. So interest rates on hold for a while longer, growth now established but with much more to come especially from construction, which has lagged thus far, and further steady improvements in the jobs market as confidence grows – these are the expectations for 2014 at least. Beyond, there is a heady mix of house prices, debt levels and global recovery rates to challenge policy makers – all in General Election year.
In the week that the IMF chooses to revise its economic forecasts, upgrading the UK to make it the fastest growth (at 2.9%) estimated in the G7 this year, those results just flooding in, albeit perhaps partly fuelled by managed services contract wins, are welcome supporting evidence to recruiters that the recovery is indeed here and real and relevant to jobseekers and job providers everywhere. Robert Walters reports a 21% rise in net fees in the UK, and Hays 14% in Q1, adding to the theory now that the gains are becoming more widespread and no longer just in narrow niche sectors.
While many recruiters (including the aforementioned) still look overseas for their fortunes, quite rightly with many growth opportunities in less mature markets apparent, this is proof that there is also much still to play for within the UK too with the right business model.
Adding to this is a wealth of economic data that continues to provide good evidence of a recovery in the UK despite continuing disturbing levels of public borrowings and consumer debt.
Also, despite his borrowings challenge, the chancellor managed to find a little headroom in his recent Budget to assist businesses through the National Insurance allowance, increased export credit and a range of other measures designed just to encourage a little more investment across the widest breadth of companies.
Nearly all indicators are pointing in the right direction to enhance economic and labour market fortunes and the Bank of England has repeatedly stated that it will not be rushed into interest rate increases – a policy helped by falling inflation, now well below target, and no serious signs as yet that the economy is over-heating.
So is all rosy in the garden for both chancellor and the Bank’s governor? Well, almost. The elephant in the room is, of course, house prices – that familiar British problem which relates to high levels of home ownership, mortgage awards, property ladders and gazumping, and their wide disparity across the UK. Once again London and the South-East, followed by certain other large cities, are seeing prices lift off yet other areas, where prosperity is less certain, remain truly depressed.
This is nothing new – it happens cyclically – the question is will the current governor act differently than his predecessors to stem any potential house price bubble? On form so far we would have to think so – differently yes but would he act prematurely, given the stakes on economic recovery? Perhaps not. So interest rates on hold for a while longer, growth now established but with much more to come especially from construction, which has lagged thus far, and further steady improvements in the jobs market as confidence grows – these are the expectations for 2014 at least. Beyond, there is a heady mix of house prices, debt levels and global recovery rates to challenge policy makers – all in General Election year.
In the week that the IMF chooses to revise its economic forecasts, upgrading the UK to make it the fastest growth (at 2.9%) estimated in the G7 this year, those results just flooding in, albeit perhaps partly fuelled by managed services contract wins, are welcome supporting evidence to recruiters that the recovery is indeed here and real and relevant to jobseekers and job providers everywhere. Robert Walters reports a 21% rise in net fees in the UK, and Hays 14% in Q1, adding to the theory now that the gains are becoming more widespread and no longer just in narrow niche sectors.
While many recruiters (including the aforementioned) still look overseas for their fortunes, quite rightly with many growth opportunities in less mature markets apparent, this is proof that there is also much still to play for within the UK too with the right business model.
