Market Loop - ✂UK growth forecasts trimmed

ECONOMY
UK growth forecasts trimmed

What’s going on?
In its latest set of economic forecasts, the International Monetary Fund (IMF), has downgraded 2022 UK growth by 0.3% to 4.7% blaming ongoing supply chain issues and Omicron restrictions.

Why is this important?

The IMF estimates that due to Covid-19 the global economy would be $13.8tr smaller by 2024 than it would have been had its pre-pandemic trend continued.

 

EMPLOYMENT
Royal Mail and Unilever announce job cuts

Yesterday two of Britain’s biggest private sector employers announced they would be downsizing their workforces.

Royal Mail – which employs 140,000 people - announced plans to lay off 700 of its 8,000 managers in a bid to streamline operations and save £40m a year.

The latest cuts are in addition to the 2,000 outlined almost two years ago.

The news came as it announced that parcel volumes fell 7% in the last three months of 2021. The rise in online shopping during the pandemic has undoubtedly helped Royal Mail’s performance since 2020 but the reopening of the high street has led to more in person shopping and therefore less demand for its services.

The company also said that the festive period was impacted by staff absences due to Covid. At the peak earlier this month 15,000 employees were ill or isolating leading to slower deliveries in some areas.

Unilever  - which employs 149,000 worldwide including 6,000 in the UK and Ireland – announced it would remove 1,500 managers to simplify its organisational structure.

The consumer goods giant has had a tumultuous start to the year, from losing out on buying GlaxoSmithKline’s consumer business for £50bn to being publicly chastised by investors for poor management.

News of the downsizing is seen as a way of showing the company is on the right track despite recent events.