“Today’s decision to increase the interest rate indicates the Bank are still pursuing strong action following yesterday’s surprise rise in inflation. Record high inflation remains the top issue of concern for SMEs, and it has been wiping out their ability to invest and grow for almost two years now."
An unexpected rise in the CPI rate to 10.4% indicates that the UK economy is still in the midst of a stubborn peak. The main drivers of inflation - restaurants and hotels, food, and clothing – confirm the pressure we see on the hospitality and retail sectors.
“Once again Government has failed to understand that the energy crisis for businesses and households are two sides of the same coin. Extending the Energy Bills Relief Scheme for households is hugely welcomed, but with reduced support for businesses planned form April, and no sign of further support, many will be reliving the anxiety they were facing a few months back."
“The Chancellor has acted to address the unfilled jobs blighting our economy. It is especially good to see the help on childcare and for over 50s workers. The plans for full capital expensing are also a step in a right direction to offset the rise in corporation tax, but the jury is out on how it will impact businesses compared to the Super Deduction scheme."
The renewed commitments to tackling climate change, sustainable development, and economic empowerment of women are all welcome in the Review. On Europe, it takes account of the impact of the War in Ukraine, for both the economy and supply chain security. UK businesses stand ready to assist in the reconstruction of Ukraine with investment, and offers of technical and business expertise.
“Today’s ONS figures provide further evidence of historic tightness in the labour market. Despite a slight fall, there are still over 1.12 million vacancies across the UK. This confirms our own research that most firms are still trying to recruit staff. "
Blog from Sarah Howard MBE, Chair of the BCC.
There was no big boost to trade volumes to start 2023. Removing cyclical factors in the trade data, goods export volumes to both the EU and rest of the world have remained constant over the past year. But goods trade values fell in January.
The delays to HS2 will start alarm bells ringing and raise fears that it will be cut further. It is also disappointing to hear that the Lower Thames Crossing has been put back two years.
UK economy should avoid a technical recession but shrink by 0.3% in 2023, before returning to growth in 2024; inflation will slow to 5% by Q4 2023. But the economy will not currently return to its pre-pandemic size until the final quarter of 2024.
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