The UK working population expects the recent market turmoil due to the ‘credit crunch’, sparked by defaults in the US sub prime sector, to have a negative affect on the UK economy.  47% believe it will have a slight negative impact on the competitive position of the UK economy and 14% believe it will have a significant negative impact, according to a third annual Deloitte/YouGov survey of attitudes to global economic competition published today to coincide with the 2007 CBI annual conference. 

Along with anticipating knock-on effects of the recent market turmoil, the UK population feels increasingly threatened by companies’ offshoring business operations. 37% (up from 32% in 2006 and 22% in 2005) believe companies should be forced to bring jobs back to the UK and a further 40% believe moving jobs away from the UK to be a bad idea.

Those working in finance and banking sector see offshoring as the biggest threat to their jobs (41%) followed by IT & Telecoms (36%); whereas the increasing numbers of workers migrating to the UK is seen as the biggest threat by those working in transport (49%), retail (48%) and food & agriculture (42%).  

John Kerr, managing partner for innovation at Deloitte, comments:
“It’s clear that recent turmoil in the financial sector and continued plans for reducing costs by offshoring is shaking the confidence of those working in the sector.  However this is also the sector where most people believe the UK will become ‘world leaders’.  This can happen if UK is in a position to benefit from operations moving offshore through the reinvestment of the cost savings to develop the high value end of the business.

Over the next 5-10 years 33% believe we are most likely to become a world leader in financial services, followed by media and creativity (25%), professional services (21%) and the arts (21%). People believe the financial services sector will also provide the best job opportunities over the next 5-10 years.

Commenting on the finding that in order to maintain the UK’s competitive position, 68% believe investment in education is needed, John Kerr Continued: “If the UK is to thrive as a world leader in financial and professional services and media and creativity sectors as the public predicts, a highly skilled workforce is needed.  People are concerned over future skill gaps coupled with an increasingly diverse migrant work force and this brings urgency to the need for the UK to identify the key areas of potential weakness in the future and to take actions on as learning, skills and training.”

When asked which countries pose the biggest challenges to the competitiveness of the UK economy over the next five years, China is by far seen as the biggest threat (72% of respondents - 76% last year); followed by India (41% - 48% last year) US (31% - 34% last year) Japan (25% - 32% last year) Germany (21%) Russia (19% - 18% last year) and South Korea 18% (27%).

David Owen, consulting partner at Deloitte commented: “Asia is now the most dynamic region in the world accounting for about half of global growth. Whereas China is seen as the biggest threat by quite some way other parts of Asia are also performing very strongly – Japan has broken out of a decade-long slump and India is also booming.

“The International Monetary Fund forecasts that Asia will grow by 8.0% this year and 7.25 in 2008 – roughly three times the likely growth rate of the US, the Euro area and the UK. As a result investors are seeing Asia as a crucial support to the global economy as the US grapples with its credit problem and the European economy flags.

Other key findings:

• 43% of respondents believe that the UK’s status as a ‘global power’ is declining while 7% think it is increasing
• 69% of respondents believe that Government is responsible for the UK remaining a ‘global power’
• 42% of respondents believe that business is responsible for the UK remaining a global power
• 72% saying they would relocate overseas if it would improve their quality of life
• After the weather property prices are the biggest driver for people considering moving overseas followed by the prospect of cheaper retirement costs.

Ends

Notes to editor
YouGov interviewed a representative sample of 1,860 18+ employed adults.

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.