Fears that Britain may succumb to a ‘double-dip’ recession are unlikely to be realised, but job losses are still on the cards across sectors for 2010, according to financial experts.
Last month official figures showed that the UK had only just moved out of recession, prompting concern that the British economy could dip back into contraction, causing a second wave of job losses across the private sector.
The economy was also hit by an unexpected collapse in retail sales in January – brought on by the bad weather and the VAT increase.
Richard Lim, an economist at the British Retail Consortium, told Personnel Today that a double-dip recession was unlikely to happen.
However, he warned: “Spending has dropped, so some companies are posting losses and not making the levels of sales. Businesses and retailers have managed to keep on staff, this has come at a cost of margins. Looking forward to 2010 the question mark is whether businesses will be able to maintain the levels of labour.”
John Philpott, chief economist at the Chartered Institute of Personnel and Development agreed: “Double-dip recession at this point is probably not a likely outcome. My view is that we will see continued weak growth rather than a dip back into recession.”
However, Philpott stressed that during the next six months the economy would be particularly vulnerable.
“Even if there is fairly muted growth, we would expect a continuation of job losses, certainly in the first half of the year,” he said.
Philpott added that businesses may struggle to continue to invest in training this year.
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“Business investment has fallen off a cliff in the past year and is still weak. There’s still no sign of a major pick-up there.
“Investment in training has held up reasonably well during the recession, but it doesn’t mean to say it’s been racing ahead,” he said.
