Recent research by the Chartered Management Institute (CMI) in their Economic Outlook (April 2010) report has shown that job insecurity in the UK has risen to record highs. The situation is reported on at management level, with 44 per cent feeling insecure compared to 27 per cent six months ago. This report paints the UK economy in an extremely negative light and highlights the continued need for appropriate mortgage protection.
The CMI’s report also shows that 70 per cent managers expect business insolvencies to increase and only 28 per cent believe employment levels will rise. In fact, the report claims that 52 percent of managers surveyed stated that their organisation currently has a hiring freeze, with 48 percent also having a pay freeze (up 4 percent from 6 months ago).
The survey of senior business executives shows that 82 percent of organisations are still being negatively effected by the recession. Morale levels are said to be worse than 6 months ago according to 63 percent of businesses.
It is evident that the positive (albeit low) economic growth figures released by the Office for National Statistics (ONS) over the previous two quarters has not been enough to build business confidence in senior managers. Gross Domestic Product (GDP) increased by 0.2 per cent in the first quarter of 2010, compared with an increase of 0.4 per cent in the previous quarter. This decline in economic growth could be a the first sign of a double dip in the economy, especially as the decline in growth came mainly from the services sector.
Thus, the latest CMI report and economic growth figures point to the continued importance of mortgage payment protection insurance (MPPI) to cover the risk of mortgage loan default as a result of unemployment. This product also covers accident and sickness should the policyholder wish to include these benefits.