Good news for the UK economy - and graduates

Will Hodges thinks there's reason for optimism

Last week, the International Monetary Fund (IMF) lifted its 2013 economic growth forecast for the UK from 0.7 per cent to 0.9 per cent. Soon after, credit rating agency Moody's upgraded its outlook for the UK's banking sector from negative to stable.

After five years of doom and gloom, has the UK's economy now turned a corner?

The UK's improving fortunes are in contrast to those of neighbouring economies such as France, Spain and Italy, all of which are experiencing falls in GDP (gross domestic product) growth this year.

The UK also appears to be bucking a trend towards lowered optimism about growth across the globe as a whole - the IMF recently slashed its growth forecast for the world economy in 2013 by 0.2 per cent to 3.1 per cent.

Banks back on track

One of the main drivers of the UK's improving fortunes has been the recovery of the banking sector. Moody's attributed its recent upgrade to the increased level of reserves UK banks are now holding, meaning they're now in a better position to withstand shocks to the financial sector.

The agency also said it expects banks' profitability levels to start making their way back up to pre-downturn levels over the year ahead.

Graduate grief

However, the Association of Graduate Recruiter (AGR) says the number of graduate vacancies is down 4 per cent on this time last year - a depressing statistic for the current crop of university leavers, many of whom are already having to contend with high levels of competition for jobs.

According to a recent AGR survey, there are currently 85 applicants for each graduate position at leading UK recruiters. Surprisingly, banking/financial services is among the sectors with the biggest shrinkages in new position numbers, while engineering, energy and telecommunications have fared better in the current climate.

Quietly confident

The competing High Fliers Research survey, however, reports employers are expecting to increase their graduate recruitment by 2.7 per cent in 2013, and not all student job-hunters are losing heart.

Sam Foster is a second year Modern Languages student at the University of Birmingham. "I feel slightly more confident about my job prospects than I did upon entering university," he says.

"Though the job market is still quite closed off for graduates, it appears those who have some work experience behind them have a decent chance of finding something."

"It's still going to be extremely difficult to find my ideal job straight away and I know the best way of improving my chances is by coming out with a good degree and by using all my spare time to work and gain experience in different environments."