The year 2020 has been quite unlike any other year in human history. The COVID-19 pandemic changed many things, and one of the things it impacted deeply is the economy in countries all over the world.
The nationwide lockdown in the UK in the face of the pandemic, the increasing burden on healthcare facilities, and increasing unemployment has pushed the country into recession. With less money to spend, there has been a sharp decline in economic activity across the country.
All of these have to lead to a recession. How do you know if a country is in a recession? Well, the GDP of the country is a good indicator for determining if it is in recession.
Technically, a country can be said to be in recession if it suffers a negative GDP growth for two or more quarters. The extend of the decline in GDP is what distinguishes a recession from a depression.
With the UK being in recession, all the economic issues plaguing the country even before the recession hit have come to the forefront. This may cause you to wonder if you can help in any way.
While tackling a recession requires many actions from the government, there are many things that you can do as an individual to boost the economy and treat many of the issues. Irrespective of how small it is, every step counts towards getting the country out of recession and ensuring a bright future.
Decline in Manufacturing
Manufacturing is a serious contributor to the country’s economy. Many factors such as the uncertainty over Brexit, cheap imports flooding the market, and lockdown restrictions since the start of the pandemic have declined in the manufacturing sector.
Since manufacturing heavily employs many people, a decline in manufacturing can severely affect many other aspects and worsen.
What You Can Do
Since you have no control over the uncertainly of Brexit, one way to encourage the manufacturing sector is by buying locally manufactured products. The UK manufactures a wide range of products. You can most of your regular use items being made in the UK.
Unemployment
Even though unemployment has been falling at an excellent rate in the country, it is still an economic issue. Many new generations are finding it hard to get jobs, and unemployment among youth is a severe economic issue.
Skill gaps between the needs of the employer and employee, geographical and occupational immobility, return of retirees to the job market, etc., are just some of the causes of unemployment.
What You Can Do
As an individual, you can encourage local businesses and ensure that you shop locally. Local companies hire local people and therefore create jobs in the region.
You can also ensure that you are constantly in touch with the changing needs of the market. This way, you can keep yourself employable.
Economic Inequality
The rising economic inequality is a significant issue in the UK. While the economically weak wages haven’t risen significantly, and the annual percentage rate on the growth of savings is also low, high-level executives’ pay packages continue to grow.
What You Can Do
While there is little to do regarding various companies’ wages, you can choose to invest your savings in high-return options. This way, the low-interest rate on savings will not impede your wealth accumulation.
Getting to Net Zero Greenhouse Gas Emissions
Fuel and electricity charges form a significant expense for the population. The target is to reduce UK’s greenhouse gas emissions to a net zero by the year 2050. It will help the population save money.
However, this is not an easy task. Currently, the government subsidies gas and electricity charges for domestic use by reducing the VAT on these utilities. It is eating away at the government’s resources.
What You Can Do
If you can afford to shift to greener energy sources without taking a government subsidy, then you must do so. Green energy sources such as solar panels in your home and more efficient electrical appliances will reduce your electricity bill while also reducing greenhouse gas emissions.
Lower Living Standards for the New Generations
Compared to the previous generation, the younger generations living conditions are disheartening. Only a tiny percentage of young working professionals can afford to own housing.
The majority are living in rented spaces. The standard of housing has also declined significantly.
What You Can Do
One of the reasons for the abysmal housing conditions among the younger generation is the high demand for housing in certain areas. It is pushing the housing prices to be higher than it needs to be.
If you are someone with a business, then you can consider having a distributed office. Employees can choose locations where the rent or home prices are lower. It will improve their living conditions.
Fall in Disposable Income
Even though wages have risen, their rise hasn’t been high enough to keep up with the rising inflation. With increased rents and utility bills, there is very little money that people have to spend.
A fall in disposable income also means that people will be spending less. A drop in the spending by the population will lead to a decline in the GDP.
What You Can Do
In the current market, the only way to increase your spending power is by increasing your wealth. To do that, you will have to invest in higher return options such as stocks or precious metals.
Monopoly in Many Markets
The electricity and gas utilities are under the monopoly of one or two companies. The lack of competition means that these companies dictate the prices in the market.
Even though there was a fall in the international fuel price, it did not reflect the fall did not reflect the UK’s fall due to this monopoly. High spending on utilities also leads to a reduction in disposable income.
What You Can Do
Changing your dependence on carbon fuels and choosing alternative companies for the utilities can help reduce the monopoly.
Bottom Line
While the country is in recession, it can become harder to get loans. However, having an excellent credit score will ensure that you can get loans in any economy. If you don’t know your credit score, then you can look here to get more information on how to get your credit report.
