UK unemployment rate at seven year low… and more


UK unemployment rate at seven year low... and more

Encouraging figures have been released this week with regards to the overall rate of employment in the UK. This is of course great news but what affect does this have on SMEs and their overall recruitment strategy. Has this for example translated into greater pay which is widespread. This will of course be discussed later in the blog. Also this week we look at how SMEs might have a greater say in England’s devolution process. As this column has covered in the past the UK is about to go through a process where greater powers will be given transferred from Westminster to local government. It is crucial that local businesses are a key part of this process.

At MadeSimple we fully support anyone who is going about supporting the needs of startups across the country. We fully appreciate the constant hard work put in by small businesses and feel it’s important to update them with the latest developments that might affect them. If you are interested in reading previous issues see here for more information.

UK unemployment rate reaches seven year low

  • The UK’s unemployment rate is at its lowest since 2008 a report from the Office for National Statistics has confirmed.
  • The number of people in work has risen by 140,000 which makes the employment rate 73.6% – the highest rate since 1971.
  • In a three month period from August workers overall earnings have gone up by 3% from the previous year.
  • Although wages, that excludes bonuses, slowed down to around 2.8%.
  • Interest rates remain where they are and the Bank of England has yet to raise them for the first time since the economic crash.

Breakdown – Admittedly sometimes these macroeconomic announcements make little difference to the everyday world of small firms. However, it is sometimes beneficial to be aware of particular developments. In this case it is clear that more firms are hiring again and the economy in general is in a better state. According to John Phillpot  one way to explain these figures is that

“Recruiters were cautious in the first half of the year because of political uncertainty surrounding the general election in May. What is clear is that hiring picked up strongly from June onwards”

What’s crucial to know is that wages are still weaker than before the crash – however that should change within the next year as we get close to the Bank of England raising interest rates for the first time in almost a decade. Whilst it is unlikely that this news will have much of an impact on day-to-day operations it is nevertheless important to be aware of these kinds of developments regardless.

SMEs should help drive devolution process says EEF

  • The biggest employment organisation in the UK The Manufacturers organisation has said that small businesses need to have better relations with local governments.
  • This is so that SMEs can become a significant part of the devolution process.
  • This is currently being debated in the Cities and Local Government Devolution Bill – which has currently passed its second reading in parliament.
  • The EEF have called for a number of provisions to be included in this bill
  • This includes allowing an independent business led overview to scrutinise segments of the bill.

Breakdown – English devolution will undoubtedly be one of the largest issues on the political agenda over the next few years. The proposed northern powerhouse, coupled with Manchester getting an elected Mayor by 2017, means that certain powers are slowly being transferred from Westminster to local government. It is therefore important that small businesses in these areas can benefit from these changes. Indeed, this process has already started with business rates being dictated now by councils. These sentiments have been echoed by Terry Scuoler, chief executive of the EEF

“To date, however, business has  felt disengaged from the process of devolution. For it to succeed in England, business must be fully signed up as partners in the negotiation and delivery of devolution deals.”

On a personal level I couldn’t agree more with the sentiment expressed here. Local businesses, who are often key parts of local communities, need to feel included within this larger devolution process. Businesses in key cities such as Birmingham, Leeds, Manchester and Liverpool need to be consulted and have a correct forum to have their views heard.

In other news… This week it has been announced by the Department for Business Innovation and Skills that the number of private businesses in the UK has hit 5.4 million. The number of small firms has risen considerably with there being 35,000 more at the start of 2015 than there were in 2014. Upon the release of these statistics Business Minister Anna Soubry stated that “It’s fantastic news there are now a record number of businesses in the UK, creating jobs and ensuring our country’s economic security.”

Thanks for reading this week’s issue. Why dont you check out our small business blogs by going to the section here. See how MadeSimple can help your business run, start and grow.

By David Goulden at MadeSimpleFollow David on Google+