Why investing in employment will be key to avoiding an economic depression
The Office for National Statistics (ONS) has revealed that unemployment benefits applications in April rose by nearly 900,000 as the impact of lockdown took effect, bringing the total to 2.1 million . Chancellor Rishi Sunak also warned that there was no guarantee of “an immediate bounceback” in the economy.
It was also revealed today that inflation has dropped to 0.8% as low fuel prices and the decrease of consumer spending as a result of lockdown take their toll. Consumer spending and confidence will be key to the survival of many thousands of businesses when retailers re-open in early July and could be a pivotal time in the move to lower unemployment.
Luke Davis, CEO of IW Capital, discusses the need to back scaling businesses to encourage job creation:
“The SME economy historically has employed over 16 million people in the UK and accounts for around 99% of all private sector businesses. So investing in scale-ups and businesses looking to grow at this time is of the utmost importance. A significant portion of investment capital goes to hiring new employees – whether that be on a production line or at upper management level.
Increasing employment has a knock-on effect on consumer spending and will be vital to encouraging people to get out and support small businesses who can then in turn hire more staff. As a private finance provider we have a duty to support growing businesses and invest in employment at this crucial time. We recently invested into an on-demand-doctor service to help the firm scale during this time and hope to back many more proven, scalable businesses to help boost economic growth and job creation.”