Monday, 16 February 2009

UK is in Deep Recession

When I came here on October 2007 the pound sterling was very strong – almost $2, 1.5 euro or 90 Php to £1. Now in just over a year, the exchange rate is just around $1.4, 1.1 euro or 70Php to £1. It certainly is losing ground as the strongest currency in Europe. Of course I suffered some losses as my pound savings has decreased in peso value compared to the time when I banked it. But I am lucky still because that is all my complaint. Others have suffered far worse. And on the bright side, whenever I eat out it’s not that painful anymore spending in pounds.

Overall situation here is very gloomy. Since the global economic market took a downturn one wakes up to headlines on the telly and newspapers about companies axing hundreds of jobs, bailouts and business closures. Everyone here is no longer certain if he will keep his job until the dark clouds ebb and everything starts picking up again. Companies are employing every cost cutting measure imaginable and are terribly cautious to spend. Everyone is tightening his purse string and doesn’t want to spend unless absolutely necessary. The glittery SALE signs of stores seem no longer effective that I suspect people who still frequent high street shops are not Brits but foreigners earning Euros here and eager to take advantage of a weak pound.

Truly consumer spending here is at its lowest, which is dragging the economy deeper into recession. I think it’s also due to newsmakers’ tendency to exaggerate, to paint the situation grimmer that it really is making the Brits nowadays more scared to spend, worsening the confidence slump. A country so used to living abundantly this situation is alien to the Brits, the reason perhaps why they are deeply affected and are behaving so defensively. It’s like for someone who lived at the 10th floor; the fall to the ground fall would break his limbs and would hurt like hell. While for us Pinoys, our fall is just comparable to a person who fell off his bed. It is painful, yes, but most of us can just shrug off the pain afterwards since we’re used to living in a country that’s always in recession anyway - Hehe =p

This morning our overall project manager gathered all of us and announced that the management has decided to halt an ongoing development because our client hasn’t still committed to a contract for that work and our company is no longer willing to lose money by covering the developers’ salaries. The developers looked crestfallen when they were told that the UK based staff should just go on bench and start looking for another project while offshore staff will be given 1 month notice, an ample time to prepare going back to their base country (India or Czech Republic). I am not part of that development team but I felt sad because it’s logical to think that this effect will also cascade to other teams. My manager two weeks ago promised to extend my assignment but as of this writing, it’s not official yet. Sigh.

I can only blame the crisis although a friend of mine, one of the project’s Technical Architect for 4 years now, contradicted me. He said this had happened already before, 4 times actually. Our company is stamping its foot down, threatening the client with a “cool off” to force it to commit. Our client has the habit of stalling the approval of contracts but he assured me it will come around a few weeks later and everything will be up and running again. Our client has no choice but to eventually approve the projects because it has a quarterly target to spend a certain budget (yes we’re working for a government project). I hope he is right and it’s not just blind optimism.

Image is from http://news.bbc.co.uk/1/hi/business/7883255.stm

No comments:

Blog Archive