Business can strike an optimistic note as autumn looms: Beckie Hart of the CBI

June’s lower-than-expected inflation figures has raised hope that interest rates could soon be at a peak, although businesses continue to face challenges. In its latest decision on rates, the Bank of England was clear that it thinks tighter monetary policy is having a definitive impact on the economy.
By Beckie Hart
Published 14th Aug 2023, 12:45 BST

There is speculation that rates - which stand at 5.25 per cent - could peak below six per cent, a shift down in expectations from just a few months ago. However, the Bank signalled that they could remain higher for longer to tackle inflation.

Alongside growing expectations inflation could be halved by the year’s end, this will be welcomed by households and firms that have struggled with the cost of living and doing business.

Hide Ad
Hide Ad

The latest GDP figures, published last week, highlighted the resilience of the UK economy with 0.2 per cent growth in April to June. However, the CBI’s latest business surveys suggest the foundations for growth remain fragile, with the demand outlook uncertain, finance costs rising and firms still reporting problems finding skilled workers.

There is speculation that rates - which stand at 5.25 per cent - could peak below six per cent, a shift down in expectations from just a few months ago, says Beckie Hart of the CBI (Photo supplied by CBI)There is speculation that rates - which stand at 5.25 per cent - could peak below six per cent, a shift down in expectations from just a few months ago, says Beckie Hart of the CBI (Photo supplied by CBI)
There is speculation that rates - which stand at 5.25 per cent - could peak below six per cent, a shift down in expectations from just a few months ago, says Beckie Hart of the CBI (Photo supplied by CBI)

In other signs of the difficulties faced by firms, the shop chain Wilko went into administration last week, putting at risk up to 12,000 jobs, and the British Retail Consortium and KPMG’s latest retail figures found July’s poor weather resulted in lower sales of seasonable clothing items such as shoes, leading retailers to discount early.

The National Institute of Economic and Social Research revealed last week that the UK economy had lost five years of economic growth due to Brexit, COVID and the Ukraine conflict. The research appears to support a CBI forecast that the UK economy will remain 7 per cent smaller than its pre-pandemic trend by the close of 2024.

While bringing inflation down will help households and firms affected by the rising price of food, fuel, and other products, the cost of doing business will stay high for some time.

Hide Ad
Hide Ad

Cost pressures on households and firms are likely to remain high.

In a few weeks, the main political parties will be gearing up for their autumn annual conferences and expect common themes to come into focus ahead of next year’s General Election, with the economy high on their agendas.

These events will be followed by the Autumn Budget when the Government will be looking to make a quick, visible impact on the economy, and create opportunities available for green growth in Yorkshire and the Humber

The CBI’s ‘Going For Green,’ report proposes that the UK urgently move into the delivery phase of investment, which would mean a boost for supply chains and new green jobs.

Hide Ad
Hide Ad

This can be achieved by the delivery of a clear and stable policy environment to build business confidence accompanied by comprehensive and competitive incentives to encourage green economic investment and an efficiency drive and better coordination of delivery mechanisms in government such as the creation of an Office for Net Zero Delivery.

As we head into autumn, I am looking forward to working with our region’s businesses knowing that you are busy producing the ideas, investment and jobs to drive growth.​​​​​​​​​​​​​​

By Beckie Hart Regional Director, Yorkshire & Humber, CBI

Related topics:Bank of EnglandWilkoKPMG