British business circles have warned of an uk economy recession. It could be brought about by a combination of several factors. These includes a slowing economic recovery, the end of coronavirus support, driver shortage problems, and chip shortages. As a result, food banks are preparing for an extreme onslaught.
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Rishi Sunak about UK’s economy recession
Finance Minister Rishi Sunak announced the end of support for companies affected by the coronavirus pandemic last week. Eighteen months later, the largest Coronavirus Job Retention Scheme (CJRS) support program, launched last March 20 and costing the country £70 billion, will end.
Under the scheme, the state-supported 11.6 million jobs in May, covering 80% of people’s salaries up to £2,500 a month. Support went to maintaining 1.6 million jobs at the end of July. One million jobs are now being held in this way, The Guardian wrote.
Sunak claims that he is proud of what has been achieved with the help of CJRS. But right now, he says, is the time to end it.
However, many companies have not yet been able to return to regular pre-coronavirus operations. The British Trade Union Federation (TUC) helped create the CJRS support plan. They warned that all the good done would be discarded and called for the introduction of a German-style exchange rate.
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British economy growth is slowing down
Influential entrepreneurs are afraid of the “autumn storm”. This according to the Guardian.
The Federation of Small Entrepreneurs (FSB) is also concerned about the “cooling of the economic environment”. It warned that the end of this support would increase pressure on small businesses. This along with the much backing for hiring apprentices and rising energy prices.
“It’s a potentially dangerous moment”. Said FSB President Mike Cherry, explaining that “there are too many small businesses”.
The Bank of England also expressed concerns about the end of support. It warns against a slight rise in unemployment. It shows that the number of jobs supported is declining, but not fast enough. The results of the British economy are worse. The fact that many carmakers reduced production due to a lack of chips also contributed to this.
In addition, the move comes when the British economy, whose recovery began to slow down before the crisis, is suffocated by a shortage of drivers. Consequently, it is unable to deliver petrol to pumps. Therefore, the deployment of military drivers is planned, but they must be trained to control distributors’ tank cars.
Other subsidies will end soon
In addition, the support of £20 million a week to the poorest, which six million people receive, should end from next month. According to the independent organization Legatum Institute, 800,000 people will fall into poverty because of this.
According to a Trussell Trust survey, a fifth of people receiving this support fears that they will have to skip one meal a day because of it.
Food banks are preparing for the onslaught. They fear that pressure will increase on them when low-income groups turn to them for food.