The service sector in the UK economy accounts for 80% of GDP within the economy and a recent survey has suggested has sparked fear of economic downturn. the purchasing managers’ index fell to 48.9 in march from 51.3 and anything below 50 highlights a decline in the sector. (BBC News, 2019). It mentions how BREXIT announcement could have been a probable course of this downturn but is worrying considering this sector makes up much of the UK GDP. As suggested by BBC news ‘ a stalling of the economy in the first quarter will therefore likely turn into a downturn in the second quarter unless demand revives suddenly. In my opinion, BREXIT causes large amounts of uncertainty for businesses and consumers as was is the ultimate cause of the downturn. If consumers stay positive and keep spending the economy will come out of the current downturn. The speculation causes a loss in demand, causing problems for businesses across the UK. The government need to create some type of certainty around BREXIT to encourage continued spending in order improve economic growth. Moreover, the government should be working on policies and protections to reduce the damage of reduced demand in order to keep businesses operating, especially small, local businesses. The small, local businesses like local pubs are the most at risk as they do not have the scale of financial backing as chains or big corporations.

Once BREXIT has been completed and the economy works through the transitional period I believe the economy in the long run, will even out and eventually promote employment and growth. But, due to the uncertainty BREXIT carries the economy will carry on into economic downturn unless measures are taken to promote spending. The interest rate is the highest it’s been since the 2007/2008 crash and could be reduce to encourage more spending by consumers, although this has adverse effects I believe it will keep the UK economy at equilibrium rather than downturn.

Overall, in my opinion BREXIT needs to either happen or be cancelled in order to provide certainty for businesses and consumers and prevent further economic downturn. During the exit from the European union, economic growth will be extremely limited due to the circumstances, but in the long run will promote labour in the UK causing less unemployment and leading to economic growth in the future.

Julian Dunkerton the founder of Superdry has been reinstated within the board of directors as he won a majority vote. The vote was sparked by Superdry’s plunge in share price which fell as low as 65% after Dunkerton left around 2017/2018. The former co-op chief executive took over and has ‘argued over who is responsible for the brand’s decline’ (BBC News, 2019), Highlighting poor management from the new executive director as they are not sure which direction to take the brand. The current management plans to ‘branch out into children swear and is trying to broaden its range’ (BBC News,2019) whereas, Dunkerton has argued according to BBC news that the brand should focus on the products which made it famous and believes venturing into children’s wear was a mistake.

There is a clear clash of interest within the directors of the brand and is a contributing factor to the decline of Superdry. I believe their are many reasons why the decision making in such a big firm has been poor. Firstly, the rate in which the brand is declining has caused a time-pressured situation for the board of directors who need to get the business back on track as their money is invested into the brand. I believe the knock on effect as caused a conflict of interest between the management. fragmenting them into opposing sides. This has an effect on the business as a whole as their is time-pressure the decision makers are reverting to their instincts and knowledge in order to make a rationale decision in the best interest of the shareholders or themselves (as shareholder’s).

I believe the reinstatement of the founder of the company will create an organisational change within Superdry. This will be positive for the brand as more perspectives and greater teamwork will allow Superdry to improve their financial situation. The reinstatement of Dunkerton has sparked a recover plan for the business a good decision by the board of directors. Highlighting a more cognitive management once the former founder was allowed back in. Superdry could be seen as taking a more contingency approach to management which is characterised by ‘there is no best way of doing it’ and tackling situations depending on the circumstances. Also suggesting, Superdry are becoming more flexible to external influences and adjusting to the current market. After the launch of children’s wear the company is changing its approach in order to increase demand for their products and making it fashionable and profitable again. I believe the change in strategy can only be positive for Superdry as they shouldn’t try to hold onto something that worked in the past and the original founder being reinstated will allow for new ideas from the man who created the global brand.

references:

BBC News. (2019). Superdry’s founder wins comeback fight. [online] Available at: https://www.bbc.co.uk/news/business-47776372 [Accessed 2 Apr. 2019].

The Office for national statistics have calculated that as many as 1.5 million jobs could be lost due to automation. The ONS defines automation as ‘tasks currently carried out by workers being replaced with technology’ which could mean programs, algorithms or even robots (BBC News, 2019).

The ONS analysed 20 million people in 2017 and found 7.4% of these were at high risk of being replaced. Which would have a profound effect on the labour market in the UK and globally. The highest at risk according to BBC News are women and young people. The effects of automation like this on the labour market will be massive.

Workers at risk or when they are replaced will become discouraged workers and will not want to work. Moreover, on a macro level this will cause structural unemployment where there is an excess of supply over demand causing the cost of wages to drop as people sacrifice pay for actually having a job. This will lead to increased number of people below the poverty line and in absolute poverty as there is less opportunity.

Further, this may also cause more people to demand higher education as lower skilled and lower paid jobs will be replaced, thus making the need to be higher skilled to ensure a job and create job security. This will put a strain on universities and collages as they have an increased number of people wanting to become higher skilled.

Due to the loss of jobs, the government will need to increase spending on benefits like JSA(job seekers allowance) in order to ensure people are not left homeless or without food or basic necessities. Again, leading to a bigger deficit in the UK balance of payments. This may even lead to higher taxation as the government try find ways of paying this added cost and will have to cut down on other expenditures.

For labour, the market will become very competitive for high skilled jobs as everyone is trying to secure a higher paid and skilled job in order for them to feel job security. This will in the long run, create more flexible and mobile labour market. But, in the short-run the economy of the UK may fall into negative growth or recession needing austerity measures to be put into place by the government.

Overall, I believe automation will have a large affect on the labour market and the UK economy. This will be a negative effect in the short run for the reasons listed above. But, in the long run I believe could create a positive impact as more people become highly skilled workers creating more transitional skills and flexibility which is good for businesses. More young people will be looking into the future as they will have more information of the jobs available which will not be taken by automation and will create a very competitive and high skilled labour market.

References:

BBC News. (2019). Automation ‘could replace 1.5 million jobs’. [online] Available at: https://www.bbc.co.uk/news/business-47691078 [Accessed 25 Mar. 2019].

Recently, Boeing 737 max 8 has crashed; killing all 157 people on board and 189 in another recent crash.

The two crashes which killed everyone on board had very similar characteristics. For example, both planes lost altitude after take off and crashed indicating a problem with the manufacturing of the planes as this plane was brand new (BBC News, 2019). The response from airlines is to withdraw Boeing 737 max 8 from flight. Boeing faces questioning after these incidents and have responded well to these problems. Boeing are suggesting they will release a software update to stop the problem from happening. They believe it is a problem with the anti-stall system as shown from a previous crash where 189 people were killed. Although, the report from the recent crash have not yet been discovered or published, it highlights a response from Boeing as this ‘simply doesn’t happen in this industry’ said former Inspector General of the US Transportation Department. But, Boeing haven’t officially responded to the crash but has ensured they will send out technicians to investigate the crash site (euronews, 2019).

The response has been dismissed as Boeings market value dropped 12% after the first crash in Indonesia. The reply from Boeing could have been improved and highlights a need for better more integrated leadership. Boeing don’t want consumers losing trust in the brand and their product but without a good response market share will decrease as it has. The CEO or executive should have responded with a calming statement and actions for the future. This form of autocratic leadership has hindered Boeing and their market value. Boeing should be ensuring consumers feel safe and feel like the business cares about the deaths they have caused. This would limit the damage to their market value already experienced. Moreover, many airlines have grounded the Boeing 737 max 8 in order to prevent further crisis. Boeing should have recalled all 737’s, although a very large task for such a large corporation. But as customers lives are at risk, it is necessary to recall the planes to improve and fix the problems properly. A recall suggests that Boeing cares about customers and people flying in their aircrafts, reducing the impact of a disaster like this on Boeing’s operations and revenues. This inability or unwillingness to recall the planes suggests inefficient operational management and incompetency by the company; It could come off as almost lazy by the brand. They have already killed over 300 people and should be taking large steps to correct this.

Overall, Boeing are not doing enough in response to these disasters caused by their aircrafts. They haven’t even released an Official statement or investigation just some ‘technicians to offer support’ which highlights complete laziness and incompetency in the leadership of Boeing. They should be doing everything in their power to ensure no more 737 go down with lives on board. Not only does it affect Boeing as a business but the airlines who have trusted Boeing to build safe and durable aircrafts. They will have financial implications due to these problems as their planes are now grounded and are unwilling to fly due to the crash problems. The leaders in Boeing should be acting faster and more effectively to limit damage and again highlights poor leadership.

references;

euronews. (2019). Ethiopia crash: Boeing 737 MAX back in spotlight after second fatal accident. [online] Available at: https://www.euronews.com/2019/03/11/boeing-s-737-max-back-in-spotlight-after-second-fatal-crash [Accessed 11 Mar. 2019].

BBC News. (2019). Boeing faces questions after Ethiopia crash. [online] Available at: https://www.bbc.co.uk/news/world-africa-47519467 [Accessed 11 Mar. 2019].

A news article from the BBC has highlighted the possible loss of 5,000 jobs in the capital, London, due to Brexit and the outcomes surrounding a ‘no deal Brexit’. The article expresses the concern of a ‘no deal’ Brexit and how important the financial sector is to the UK economy as firms could simple choose to ‘flick a switch’ and move to the continent in order to carry on trading and growing without the speculations of the UK economy. Personally I found this report particularly interesting as it is completely based on assumptions of what might happen in the UK and to UK businesses. The UK wants to keep London to remain a ‘major financial centre’ as the financial sector generates around £70 billion in taxes for the government but there is no evidence to suggest firms will even move employees and offices out of the UK. Even the treasury has not bothered to make calculations of the potential loss to the UK economy, which arises the question of why are news reports even making assumptions about the amount of jobs that could be loss? and the potential damage this could cause the UK economy. All these predictions and figures about the potential damage is completely based on assumptions and doesn’t have solid evidence to create these assumptions for example ‘5000 jobs will be loss’ as it has never happened and the whole country including the Bank of England and the treasury are unsure and have uncertainty into what might happen. How can you predict the outcomes of Brexit when there is no previous evidence to suggest big problems occur as a result of leaving the EU and the customs union.
In conclusion, my interest in this subject is constantly expanding as the speculation and uncertainty grows and the only thing business are able to do is speculate, they cannot make decisions based on what type of agreement happens as they have no idea of what might happen. The government and the treasury, believe is can be potentially bad for the UK economy and more than half of our GDP goes to the EU. More than likely it will have a negative impact on the UK economy in the short-run, but in the long-run we could see potential benefits to the UK economy thanks to Brexit, unfortunately as an event like this has not happened before and there is no previous economic model to follow the process of leaving a customs union businesses are simply left to wait and see what happens with the trade deals the UK are able to salvage. The financial sector in the UK is extremely important and a loss of businesses due to a no deal Brexit would give significant impacts to the UK economy but in the long-run more entrepreneurs and new trade deals and new businesses could potentially give the UK a bigger boost in economic development and could create more jobs for UK citizens but this again is completely unknown and it is almost impossible to predict what might happen as a result of Brexit. All predictions in regard to the potential loss of jobs in the UK due to Brexit are predictions and not set in stone, in reality not many people know what will happen and the impact of a large economic event due to the uncertainty surrounding Brexit and the deal, will it be a ‘hard Brexit’ or a ‘soft Brexit’. All predictions in regard to the potential loss of jobs in the UK due to Brexit are predictions and not set in stone, in reality not many people know what will happen and the impact of a large economic event due to the uncertainty surrounding Brexit and the deal, will it be a ‘hard Brexit’ or a ‘soft Brexit’.

Thanks for joining me!

Good company in a journey makes the way seem shorter. — Izaak Walton