Manpower, an employment group in the UK reported that there were over 20,000 job openings to deal with the number of claims for mis-sold PPI. The giant and well known banks in the United Kingdom have opened its doors to employing more people. The instant boom of the numerous jobs was due to the ongoing issue on PPI mis-selling and the interest rate swaps. Two big banks like Lloyds and Barclays already increased the amount of money to be used for the PPI claims. It was already reported before that the banks have set aside and amount of £17 Billion allocated for the PPI claims.
The Managing Director of Manpower’s UK, Mr. Mark Cahill told BBC during an interview that the said 20,000 jobs exclude the job of the workers to ensure that regulations are met. He also said that not only the banks hired more employees to tackle the issue but also including the Office of the Financial Ombudsman. They have been recruiting more employees. It is also believed by the Manpower that the private sector will have a slow hiring rate compared to the public sector for the coming months.
It was reported that working on the PPI claims would entail a greater task. The Manpower said that thousands will be employed to slowly tackle every customer’s claim from the overdue mis-sold PPI. The said jobs will focus mostly on how to solve and arrange the claims of every affected customers of their own bank. According to Mr. Cahill, most of the jobs that were created were a result of the mis-selling.
With business lending in the UK falling to the lowest levels since 2006 it is estimated that a £21bn deficit will hit smaller businesses particularly hard. The problem has come about thanks to the ongoing economic downturn and, despite the government’s insistence that we are now out of the recession, there is little sign of light at the end of the tunnel.
Reports state that lending has fallen by as much as 4.6%, this representing a total lending figure of £429bn. There is concern among industry analysts that lending will not reach the levels seen in 2008 for at least four years, meaning small firms have a struggle ahead just to survive. The problems have arisen thanks to the poor economic situation as well as the reluctance on the part of banks to lend, especially as they are facing serious problems in light of the PPI and Libor scandals which have had a serious impact on their available cash.
Improvement on the Cards
Although immediate returns to previous levels of lending are not forecast, industry analysts are confident that 2012 will be the last year of falling lending levels. If the country is genuinely heading out of the recession there may be positive news on the horizon, but the question remains as to how many smaller businesses will have failed by then in their attempts to weather the storm. Banks are frequently blamed for not supporting smaller businesses, but they are not the sole problem.
The business bank recently set up Business Secretary Vince Cable is also singled out for lack of progress. Accountants say that the intended lending from this government initiative is unlikely to cover the deficit that is being faced by Small and Medium Enterprises (SME’s). Quite what can be done to recover the situation is not clear, but it is hoped that 2013 will see a slight increase in lending levels and create a positive outlook for the future of smaller business in the UK.