Tag Archives: UK economy

News

One in three UK freelancers don’t feel confident about their long-term future due to IR35 and economic uncertainties

  • Only 53% of UK freelancers aren’t considering a full-time job, with 35% thinking about it;
  • 51% of UK freelancers have an impression of business opportunities’ slowdown;
  • Yet only half of full-time UK freelancers (48%) could raise their daily rates to align with the inflation.

London, UK, 1 May 2024: Freelancing in the UK took a hit due to IR35 changes and economic instability, as 35% of UK freelancers don’t feel confident about their long-term future, according to Europe’s largest talent marketplace, Malt.

In its latest ‘Freelancing in Europe 2024’ report,  the number of UK freelancers who are confident is lower than the overall European average (69%), especially compared to countries like Germany (86%) and France (75%).

As a result, only half (53%) of freelancers are not looking for a full-time job, with 12% actively searching for it and 35% thinking about it. This is a big contrast to other countries such as Germany, Belgium, and the Netherlands, where freelancers are much more confident in their career choices, with 72%, 71%, and 70%, respectively, not looking for full-time employment.

The UK is also one of the most impacted countries when it comes to business opportunities – more than half (51%) of UK freelancers have an impression of a slowdown due to the economic environment. Compared to other European countries, freelancers feel that they have more or the same business opportunities, with only 32% in France, 32% in Germany and 39% in Spain feeling a slowdown.

The situation is exacerbated with the rollout of IR35 – some companies, especially in financial services, have banned freelancers entirely, while others try to avoid UK freelancers and prefer to work with European ones to avoid adhering to IR35 rules.

Quentin Debavelaere, General Manager for UK, Benelux and Middle East at Malt, said: “Economic uncertainties and especially legislations like IR35 are the main pressure points for freelancers in the UK. Many organisations have slowed down their investments by reducing marketing spend and focusing on core business activities. This resulted in a big slump in the demand for advertising and consulting services, in stark contrast with 2021 and 2022. For freelancers, this means lower opportunities for the creative class and management consultants.

“Yet, it’s not all doom and gloom for the UK freelancers. Some organisations see an independent workforce as a formidable lever of flexibility. Several companies will definitely aim for having 15-20% of a flexible workforce in the future to cope with increased volatility.”

To combat high inflation rates, nearly half of full-time UK freelancers (48%) raised their daily rates to align with inflation. The proportion of part-time UK freelancers who raised their fees is even lower – 43% – probably due to fear of jeopardising a valuable supplemental income source. This is a stark contrast to Spanish freelancers – 75% increased their rates dramatically due to inflation.

Despite the current economic uncertainties, UK part-time freelancers are faring much better – 53% want to do more independent work, and 35% want to continue to do independent consulting part-time. This might be partially due to the fact that many UK part-time freelancers are waiting for the economic turbulence to settle before leaping into full-time freelancing opportunities.

Zooming in on UK freelancers in specific industries, confidence in freelancing as a long-term future is high across industries such as Business Consulting (77%), Tech and data (77%), and Art and design (71%).

“Freelancers offer a competitive advantage in the marketplace primarily due to their ability to deliver services with lower overhead costs and greater flexibility compared to traditional outsourcing companies. This efficiency enables them to provide high-quality services at exceptional value, making them an attractive option for clients, especially during periods when many companies are reducing their budgets.

“While the economic turbulence and IR35 might be mudding the waters, freelancing will continue to thrive across Europe. It’s not considered a side hustle anymore but rather a conscious lifestyle choice, especially for younger generations who value flexibility above all else. Moreover, large organisations like L’Oreal, Schneider Electric, BT and WPP are finally seeing independent talent as valuable members of their ‘superteams’, bringing enormous value to their operations.

“We at Malt are very proud to not only be the conduit of independent talent for companies but also the cornerstone of the fantastic freelancing community, and we look forward to growing our support in 2024”, concluded Debavelaere.

To find out more about the current freelancing environment across Europe and see how the UK fares against its European counterparts, download the report here.

Manufacturing, News

Technology can be a saviour for the manufacturing industry

Written by Kunal Sawhney, CEO, Kalkine

Manufacturing has been a critical part of the UK economy since the beginning, playing its role efficiently and making the nation a leader globally. In 2021, the sector accounted for 9.7% of the total UK economic output. The pandemic deeply bruised almost every industry segment, and its deep-rooted impact was also visible in the manufacturing sector.

The latest survey result of UK S&P Global-CIPS manufacturing purchasing managers has indicated that the manufacturing activity in the country has started picking up pace, albeit at a slower rate. The manufacturing purchasing managers’ index was at 55.8 points in April, higher than the level of 55.2 registered in March, its five-month low.

Inflation plaguing the growth

The survey result has highlighted the inflation worries, which continued to build pressure on the sector, with 85% of respondents reporting an increase in purchase prices and the input costs surging to the second-strongest rate in the survey history. For the last some, time there has been a continuous rise in chemicals, energy, metals, packaging, timber, and electronics along with foodstuffs, putting pressure on the input costs. Some respite was seen with ease in global supply chain constraints, but at the same time, other material prices continued rising. The rise in prices is acting as a drag on business costs amid skewed demand.

It has also highlighted the different headwinds the sector continues to face. The demand scenario in the domestic market has worsened, while the export orders weakened at the start of the second quarter. Supplier lead times continue to lengthen. The rising prices of raw materials have hit the producers, and it can reflect in the cost growth in the next quarter. A separate analysis has reported that 6 out of 10 businesses are all set to hike prices in the coming 12 months, which would further hinder household spending and bolster the cost-of-living crisis.

Technology can act as the saviour

Manufacturing has gone through revolutionary changes, and now it is an ever more automated and technology-driven industry. Throughout the industry, the application of advanced technologies and systems is being used, and now it is being said that it could see a fourth industrial revolution driven by data that is helping them increase productivity, simplification of production, and making the businesses become more creative.

The country’s manufacturers have entered a new era with the help of technology. There is growing interest in investment in manufacturing technologies. It is not a hidden fact that manufacturing has always had an appetite for technology. Now, all the game-changing advantages of modern technology like big data, artificial intelligence (AI), and advanced robotics are being used to gain a competitive advantage in the manufacturing industry.

The way ahead

The manufacturing sector at the time of recovery has been hit by the lockdowns in China and the Russia-Ukraine war when Brexit was already taking its toll; these global developments have derailed the growth momentum of the sector. A report has stated that over 130,000 manufacturing jobs have been lost during the pandemic, which could cost the sector almost £850 million.

However, the growth in manufacturing output and order books underlines the demand outlook of the sector. The government will have to support the manufacturers so that the downward trend in optimism can be restricted at the earliest possible. Some measures had been announced recently by Chancellor Sunak in his Spring Statement, but to combat rising cost pressures, businesses may need specific support before the Autumn Budget.

Business, COVID-19, News

Oxford-AstraZeneca vaccine approval provides optimism for UK and its private sector as we enter the new year

As a turbulent 2020 comes to an end, we can all look forward to some form of normality as we venture into the new year after the approval of the Oxford-AstraZeneca vaccine, which is expected to be rolled out in the UK next week. With almost half of Britain now under tier 4+ restrictions and many small businesses facing closure after a difficult festive period, such news is sure to bring optimism for businesses and investors alike as we enter the new year, providing much needed rest-bite for businesses to help them recover and enable future growth.

Since the onset of the pandemic, the vaccine roll-outs have been the first real news announcement that has viable potential to support society back to “normal” and this is in no small part down to vital biotech innovation that has been able to move forward at record speed when it was crucially needed. Today’s landmark announcement comes as a welcome reminder for the UK’s investor community to support future facing innovation both by way of R&D and scale-up finance; arguably, despite the global benchmark set with today’s announcement, the cumbersome nature of pharmaceutical advancements has definitely been brought into focus with the onset of the pandemic.

Private investment is a vital catalyst for wider economic growth – with the UK’s high net worth community providing essential early indicators for the direction of wealth at a time where the distribution of capital is key. With a 12% increase in new businesses starting up during 2020 compared to 2019, the new year is set to create some exciting investment opportunities for investors throughout the country and some that are sure to boost the wider British economy.

Over and above its financial impact, the vaccine also serves as a significant moral booster for the UK’s workforce in a period where uncertainty is rife and the economy is only as strong as the workforce that underpins it. The wider sentiments of returning the work safely is paramount and with the widespread roll out of the Oxford and vaccine to start next week, many across the UK will now be able to return to their jobs in a safe manner without having to worry about their health, furthermore helping to revitalise the economy from the ground up.

Private capital has proven to be fundamental in helping UK businesses grow and flourish post-pandemic, and will be a welcomed sight for many SMEs throughout the country. The news of the vaccine’s approval is sure to bring investment flowing back into SMEs and start-ups which is key for the resurgence of the UK economy, with the SME community making up 99.9% of private sector businesses.

Luke Davis, CEO of IW Capital says:

“The approval of the new vaccine is a welcomed sight for investors who now see an opportunity for growth, with such great news bringing optimism for both investors and small businesses alike as we enter the new year. Its roll-out will provide a vital boost for small businesses throughout the UK.

“It’s truly positive to see an increase in new businesses compared to last year even with the uncertainty and limitations that the pandemic has produced. With more and more people looking to start their own businesses, private capital is proving to be crucial for the development of these entities, and with the new year bringing hope to investors, we should start to see these new businesses grow and flourish post-pandemic.

“Here at IW, we prioritise BioTech investment as we understand the importance of the industry and its impact during these times. Now, there is a real need for investors to look towards the industry to support such future facing innovations that now play an integral role in our society.

“The SME community make up 99.9% of private sector businesses, and so supporting them to ensure their financial growth, is of the utmost importance to the overall health of the UK economy. Small firms already employ over 16million people in the UK, and pre-pandemic, this sector was growing at a faster rate than the overall job market. A return to this would provide a welcome boost.”