Now that George Osborne has laid out his budget for the coming year, which is his fifth since becoming Chancellor of the Exchequer in 2010, the analysis has begun on what these decisions actually mean for us. We focus on the main points which are likely to affect UK recruitment and businesses this year.
More people are working. According to the OBR (Office for Budget Responsibility) unemployment is expected to be at 6.8% this year, which is lower than the figure predicted at the end of 2013. Youth unemployment, however, continues to be an issue. Although this rate has also fallen it is still higher than in other age groups.
Private sector jobs are growing faster than public jobs are being cut. Jobs in the private sector are expected to grow by 3.3 million between 2011 and 2019, which will more than offset the redundancies being made in general government employment. More and more people are also turning to self-employment, possibly due to the boom in construction over the past year.
Wages will meet (then overtake) inflation. At 1.9% inflation is lower than expected (the OBR predicted it would be at 2.3%), and average earnings are also up meaning that the gap between the rate of inflation and household income is decreasing.
An economic boost for small and medium businesses. Overall, this budget has proved beneficial for businesses, particularly small and medium sized companies, who have welcomed the focus on investment and exports. First of all the annual investment allowance has been boosted, encouraging businesses to grow. Second of all, exports have been given a much needed boost with export finance support being doubled. Encouraging exports is vital if the economic recovery is going to remain sustainable, and without this injection Great Britain is likely to fall short of the government’s own target.
Although this is just a summary and does not show the whole picture, the overall mood of this year’s budget has been fairly positive. The figures are most definitely showing a general improvement in the economy, which is obviously a good thing for businesses, and therefore recruitment too!
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