Recent economic developments could potentially leave their mark on the UK’s insolvency figures, the Debt Advisory Line’s Craig Gedey has said. While the UK held on to its triple-A rating with financial services agency Standard and Poor’s – a sign of stability compared to the downgrading of the USA earlier this year – there were plenty of reasons to worry about a possible rise in bankruptcies, with the job market still shaky and the long-term growth outlook anything but promising: “Especially with regards to the uncertainty of the current situation, we strongly advise a close inspection of the labour markets as well as its impact on those who are already facing difficulties in paying back their debts“, Gedey urged, “While we welcome some of the encouraging steps the government has taken, we also feel a warning is in place: Even a minor movement in the wrong direction can tip the situation towards a serious nation-wide problem.“
Indeed, the outlook on the UK’s economy by those shaping it is mostly gloomy. A report published on October 4th by the Chartered Management Institute (CMI) outlining senior executives’ views on the state of the economy in 12 months and beyond, although offering “a glimmer of hope“, summed up the status quo as filled with “concerns held by the UK’s managers and leaders about the current eonomic situation and the private sector’s ability to provide growth and jobs in the coming months“. Few of those taking part in the survey expected growth numbers to rise over the next year, while as much as 50% suggested their organisation had either decided on a fully-fledged recruitment freeze or was anticipating a decrease in recruitment budgets between now and March 2012.
On the upside, industry leaders still saw a potential for change through incisive government actions. CMI’s Director of Policy and Research Petra Wilton said: “We echo our members’ calls for the Government to support employers in training their employees and bringing skilled people into their workforces. The extensive restructuring across all sectors over the past three years – which looks set to continue – has left skills gaps and it’s vitally important that professionally qualified managers are in place if organisations are to recover from the ongoing change and succeed in the future.”
Gedey supported these calls for more education, as additional qualifications indeed allowed those out of job a better chance of re-entering the workforce in the near future. But he also pointed out the need for pro-active behaviour before a possible crunch: “We welcome moves to improve the skills of the workforce, but what happens if more people lose their job than the market can absorb? A massive debt issue may be ahead of us, unless those facing bankruptcy start thinking about way of restructuring their debts. One of the best ways of doing that is through sensible debt management plans and debt consolidation measures.“