The big steel corporation Tata Steel has said that the UK steel industry wouldn’t be able to cope with an economic downturn. But with interest rate spikes, high rates of inflation, and general economic uncertainty, what could this mean for the UK steel industry?
Tate Steel recently did a stress test on its European sector, and it showed that if there was an economic downturn, its European sector wouldn’t be able to cope. With 8,000 workers relying on Tata Steel as a source of income, this could be fatal for them. This is alongside the dismal business report by Tata Steel, which states that earnings at Tata Steel Europe, which includes the UK business, fell by more than 60% in the year to March 31.
However, there is a silver lining, and that is that Tata Steel may receive support from the UK government. Tata Steel and the government have been in talks about a change in the steelmaking process.
Tata Steel may implement a steel-making process that emits less carbon. In this case, the firm is entitled to receive £300 million from the government alongside a £3 billion bonus for decarbonizing the Port Talbot branch.
This capital investment could make or break the UK steel industry, as Tata Steel has stated that they’ll make a decision in 12 months on whether they’ll continue their UK business.
“Specific actions to improve business performance will ensure that we manage this period of downturn.” Therefore, there is a chance of hope, but only time will tell whether this industry will survive.
Tata Steel UK
Written by Mueez Lodhi
Produced by Madhav Bhimjiyani