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Why are we seeing more job losses if the economy is improving?

Over the last few weeks we have seen an increase in job losses at some of the U.K.'s more prominent companies despite the fact that the UK economy has officially moved out of recession. Many people will be confused to see the UK economy on the up but job losses continue to be announced on a daily basis. So why are we seeing more job losses if the UK economy is improving?

As we have mentioned on numerous occasions, there is a significant lag between a recovery in the UK economy and a recovery across the whole business arena. In the boom times many companies increased their cost base to levels which were unsustainable when business began to fade and the recession began to hit home. As a consequence, we have seen an ongoing reduction in employee numbers and employee costs as business leaders try to re-align their companies with the current economic climate.

Despite hopes that the UK unemployment figure had peaked and begun to fall back there is a real chance that the figure will rise again in the short to medium term. This will not only place more pressure upon UK businesses and UK employees but we will also see an increase in state benefits in the short term.

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