As UK unemployment approaches 2.5 million there is a feeling of relief in some quarters that the worst may be over and the steady increase in the unemployment number has started to slow. Indeed, figures for last month show that UK unemployment rose at its slowest rate for some time with many suggesting this is to all intents and purposes the first sign of an economic recovery.
However, while it is good news to see the rate of growth in unemployment slowing down it will be some time before we see the figure fall to more “traditional levels”. Slowing the increase in the level of unemployment is one thing but actually reducing unemployment significantly is a totally different challenge. Even if the UK economy burst into life next week there will be businesses still looking to reduce their costs and reduce their expenditure in the short term, something which will inevitably lead to further job cuts even in a new period of economic growth.
Part of the problem is that UK banks are still putting pressure on UK businesses to squeeze as much productivity and cash flow out of them as possible. With many banks unwilling or unable to forward further short-term funding to see UK business through the “bad times” there will be many challenges ahead for those in the UK business arena.
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