Hiring Slowing Down In the UK As Recession Looms
A report from KPMG shows UK hiring has slowed down, indicating the economy is losing momentum and recruiters are becoming more hesitant about hiring new staff. The slowdown is also attributed to ongoing skills shortages. Inflation has reached a 40-year high but is expected to fall back to 2% in two years, according to the Bank of England. The news is not good for job seekers, but it is better than nothing.
Bank Of England Warns Of Impending Recession
The Bank of England recently forecast that Britain is entering a recession. While the country’s unemployment rate is at a 40-year low, consumer price inflation is likely to hit 13.3% in October. A spike in energy costs, following Russia’s invasion of Ukraine, will also increase the cost of energy for households. With these high prices, it is no wonder that many economic analysts are calling for a review of the BoE’s mandate and a clear direction of travel for monetary policy.
The Bank of England is already warning that the UK will soon slip into recession, and has already raised interest rates to curb soaring prices. The recruitment industry has become more cautious, as the uncertainty surrounding the economy is leading many to be hesitant to hire. While starting salaries are increasing, the supply of suitable workers remains tight. However, the Bank of England has argued that the UK will enter recession in the last quarter of this year, and raised interest rates to counteract this trend.
Inflation Rising To 40-Year High
Last month the UK inflation rate reached a forty-year high. Fuel prices rose above eight percent and food prices reached record highs. The rate of inflation is the highest among Group of Seven countries and is likely to keep on rising. Last month’s report came as the British pound fell below the $1.22 mark, but has since recovered. The Bank of England is unlikely to act forcefully based on this data, but it will continue to monitor wage settlements and the job market.
Recent developments have put the Bank of England under pressure. The central bank’s governor is under pressure to keep inflation low and will have to weigh the need to cut interest rates against the need to keep inflation low. “The Bank of England is feeling the heat from the recent events,” said Andrew Bailey, the president of the Resolution Foundation think tank. “Britain’s inflation has been rising faster than most other advanced economies,” he said. “The recent Covid-19 lockdowns have added to the pressures on the international commodities market. The Bank of England is likely to act forcefully if it sees inflation exceeding its target.
Inflation Falling Back To 2% In Two Years
The Fed’s latest interest rate hike will raise rates by a quarter-point on March 16. Powell says inflation will take longer to reach the central bank’s 2% target. He says the central bank expects to hike rates seven times in 2022. Powell has been optimistic about the economy, predicting that inflation will fall back to 2% by December. But his warnings are tempered by the fact that unemployment is at a record low and job growth has slowed.
A decade ago, the breakeven point for inflation was 2.7%, but today, that number has fallen to 2.4%. That’s even though inflation was at 2% at the beginning of the year. But in mid-November, inflation had already surpassed the five-year breakeven point. Meanwhile, inflation reports for December and January were hotter than forecast, indicating that the rate of inflation remains stuck at above-target levels.