Chances of the recession may be looming over Britain, but the pandemic is testimony to the fact that the British Asian community has always emerged victorious over any situation or challenge that nature or circumstances have thrown at them. Their resilience lies in the power of collective good, charity, keeping traditional sustainable methods of living alive away from the homeland, following an eco-friendly lifestyle and most importantly - economical living. In times like these when the global economy is undergoing a difficult time in the history of pandemics, Asian Voice spoke to businesses, academic experts and individuals who admit that there is a huge challenge ahead of us, but they also mentioned that if there is a will, there is a way.
Though the Bank of England hasn’t used the word “recession” in its warnings, economists are coming to the conclusion that the UK is heading towards one– if not already in it.
On Monday, Bank of England governor Andrew Bailey, and two members of the institution’s Monetary Policy Committee (MPC), were allegedly probed by MPs on the likelihood of a UK recession.
Media reports suggest that we are “back to the bad old days of the 1990s as recession looms for UK” as the BoE issues warnings of 'apocalyptic' global food shortage, while Governor Andrew Bailey says he is 'helpless' in face of surging inflation.
With “very big income shock” the UK stands at the risk of double-digit inflation before the end of the year.
If trade pundits are right, the consumer prices index will be at its highest level since 1990, when the UK was struggling with one of its worst post-war property slumps and a full-blown recession. This is when the disposable incomes across the country have been hit hard for all families.
Britain’s GDP will fall by 0.2pc in the three months to September and another 0.4pc in the final quarter of 2022 as “stagflation” threatens, before returning to years of mediocre growth, The Daily Telegraph reported.
The impact of the recession will not just shake up the already unstable foundations of businesses and individuals, but also shatter middle-class dreams of having more disposable income, and even worse for those who are ill, suffering from Long Covid, non-Covid or terminal diseases. According to a report in The Guardian, unemployment is forecast to remain low, at 3.8% – the same as the previous month – though this figure is flattered by the 500,000 workers, mostly over-50s, who have quit the labour market in the past 18 months.
While economists have warned that Rishi Sunak's failures will trigger a recession, the Chancellor told the BBC he was "ready to do more" but did not commit to further action on tackling the rising cost of living. The Chancellor would not say whether a recession was likely in the coming months but did admit that the "global economy is facing inflationary pressures", because of the war in Ukraine.
No country can escape a recession
Speaking to Asian Voice, Professor Siddhartha Bandyopadhyay, The Department of Economics Professor of Economics, University of Birmingham said, “The current state of the UK economy is grim, with inflation at 10% and the economy predicted to shrink over the last 3 months of 2022. Its impact will be felt by everyone in terms of a drop in real income. Vulnerable groups are having to make tough choices around energy consumption vs food, and the middle-income group is struggling to meet its outgoings, While most of the factors are driven by world events, governments are under enormous pressure to consider emergency measures. While there is a risk of spending one’s way out of trouble (because of the larger debt burden in the future), there is an even greater risk of letting the economy shrink further with businesses facing lowered demand if people are forced to cut back spending. Governments need to guard against not becoming isolationist as trade can be the engine of growth needed to boost the economies of all countries.”
Multi-award-winning businessman, social reformer and philanthropist, Lord Rami Ranger CBE told the newsweekly that he thinks Mr Sunak is working to lessen the impact. He told us, “The world’s economy is going through an unprecedented time due to the Covid-19 pandemic, which is still not over after nearly three years. The second-biggest economy, China, is still grappling with Covid. Many big cities in China are under a lockdown regime. The industrial output is at its lowest, which has resulted in a global shortage of almost everything.
“The hospitality industry is still facing considerable challenges. Firstly, there is a staff shortage as the workers have not returned to work. Secondly, tourists and businessmen are not making as many trips abroad as they used to. It all adds up to create a global recession. No country can escape recession in a worldwide economy as most economies are interlinked through trade.
“The Russian invasion of Ukraine has compounded the situation and disturbed the fragile recovery countries were beginning to experience. Russia is facing worldwide sanctions, and in retaliation, Russia is barring western companies from selling their products and services. Europe depends on Russia for its energy needs, and alternative energy sources will add extra cost and take time.
“The impact on the economy will be significant as energy and food prices have already gone up. Many households will struggle to meet the energy and food bills as the wages have not gone up to keep pace with the inflation. “We in the United Kingdom are fortunate as we are experiencing full employment. In fact, there is a shortage of labour in the farms, hospitality and care sectors. The Govt has taken up a levelling programme where deprived areas will receive extra funding to help support local businesses and communities. Chancellor Rishi Sunak is working to lessen the impact of the global recession in the United Kingdom. The process takes time, but we will bounce back as a nation. A free trade agreement with India will bring added stimulus to the economy.”
Commenting on the impact of the recession on the travel industry, Jaymin Borkhatria of Southall Travels told us, “This could be a worrying time for some households as we hear in the media reports of slowing economic growth and rising prices. Holidays are important to look forward to as is visiting family overseas. Forward planning usually pays dividends as flight capacity has not yet reached 2019 levels. Also, if fuel prices remain high the cost of travel may increase in the future.”
Recessions are a good time to capture market share
Business Growth Coach Shilpa Panchmatia said, “Recession is a brilliant time to start a business. Yes, recessions create problems; a key one being that investment in innovation slows down. Being forced to minimise overheads will stress-test the business' finances, productivity and profitability - making a lean yet robust model for future market undulations. Remaining agile while prioritising long-term growth will not only help businesses overcome a downturn but also lay the foundation for continued success. Recessions are a good time to capture market share when other businesses are distracted. I’ve been through no less than three recessions and found the upturn afterwards to be phenomenal. Uber Disney and FedX are some iconic brands that were born in a recession and have thrived. You're in for a ride but it could be the best yet!”
Investing Expert and Asian Voice columnist Alpesh Patel OBE listed some key points that could possibly help the elderly cope with the recession. According to Alpesh, the elderly need to be aware of the benefits and help available from Government and other places. He suggested that they get someone computer literate if they are not to help them. They should visit Citizens Advice too/ Mandir re help – most Mandirs would have helpful people. They must also write to the paper to seek help if they cannot through the above two. AgeUK gives help at home and helps with benefits – heating, public transport, council tax, housing, urgent or one-off expenses, Attendance Allowance, carer’, he added.
Two-fifths of London's Universal Credit claimants are already in work as pay lags behind inflation
In response to new Government statistics, revealing that in March 2022, 41% of London’s 916,000 Universal Credit claimants were in employment, Labour’s London Assembly Economy Spokesperson, Marina Ahmad AM, said, “Amidst this spiralling cost of living crisis, the stretched incomes of over 900,000 Londoners are being hit by the legacy of the Government’s scrapping of the weekly £20 Universal Credit uplift.
“When the Government brought in the cut, Ministers tried to justify it by saying it would help move more people into work. But this misses this point when two-fifths of people relying on Universal Credit are already in jobs.
“The Government’s boasts about the unemployment rate ring hollow when regular pay is lagging behind inflation. Many of my constituents are working every hour they can and still need to claim Universal Credit.
“As well as strengthening the safety net, the Government should be finally getting a grip on in-work poverty. Instead, we have had some condescending advice from a Minister telling people to just find a better job, along with a National Insurance hike at the worst possible time”.
Over a third of adults say they’re unable to afford adult education
Meanwhile, a YouGov survey of 2,109 British adults commissioned by distance learning provider Oxford Opening Learning found that, although 69 per cent of respondents said they could be motivated to learn for any type of new qualification - from GCSEs to PHDs and industry certificates - only just over a quarter of Brits (27 per cent) are likely to actually do so.
The biggest barrier to British adults continuing their education is cost, with more than a third (35 per cent) saying they’re unable to afford to study, while almost a fifth (19 per cent) say they don’t have time.
The five most common issues that stop adults from continuing with education in the future are Lack of affordability (35 per cent), Time constraints (19 per cent), Not needing any further qualifications (18 per cent), Lack of motivation (17 per cent) and Lack of energy (17 per cent).
Almost half of the millennials (25–34-year-olds) say they are likely to consider studying for a new qualification in the future.