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Date: 24/03/2016

This week’s policy update looks at Brexit and the economy, the Midlands Engine and the latest report showing how 'old boys' networks are holding back women in business.


  1. Brexit and the economy: ‘Serious Shock’ VS ‘Small Impact’
  2. Midlands Engine fuelled by Budget
  3. Recent report shows how women are held back by ‘old boys’ networks
  4. UK inflation rate stays at 0.3%

1. Brexit and the economy: ‘Serious Shock’ VS ‘Small Impact’Ahead of the referendum on Thursday 23 June this year, leading groups and campaigners for both sides have been quick to make assumptions and predictions on the impact of a possible Brexit.

This week the CBI have said that an exit from the EU would cause a “serious economic shock”, potentially costing the UK £100bn and nearly one million jobs. The report argues that the savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment.

However, Vote Leave Chief Executive Matthew Elliot has said employment and the economy would continue to grow after an exit. Moody’s credit agency released a report shortly after the CBI released their report, arguing that the impact would be “small” and unlikely to lead to big job losses.

While the report accepts that a Brexit would create significant uncertainty, it argues that this would be offset by a decline in the pound – making UK exports more competitive – and by companies having time to adjust during UK – EU negotiations that it expects to last two years.

Remain campaigners, such as Carolyn Fairbairn have said that the EU will be in no particular rush to do a deal with the UK and the country would have to re-negotiate 50 deals around the world that are currently run through the EU.

The debate continues... 

2. Midlands Engine fuelled by Budget

More than £250m from the Chancellor’s 2016 Budget will fuel the ambitions of the Midlands Engine for Growth.

George Osborne’s latest announcements saw a number of Midlands Engine funding ‘asks’, answered by the Chancellor – including:
  • £250m agreed for a Midlands Engine Investment Fund – to invest in SMEs
  • Transport initiative Midlands Connect – working to integrate transport networks across the region
  • Priority roads development work will included the development of the M1, between London through the Midlands, into a ‘smart’ motorway
  • £1.8bn allocated through a further round of Growth Deals with LEPs, including the 11 in the Midlands Engine area
Following the Budget, Gary Woodman, Executive Director of Worcestershire LEP, commented:
“We are pleased to hear the Chancellor’s vision of continued growth for the national economy, a trend we have seen within Worcestershire. Worcestershire has also seen the fourth largest economic growth, 4.5% over the last five years (2009 – 2014), highlighting the growing strength of our local economy.” 

3. Recent report shows how women are held back by ‘old boys’ networks

Nearly a third of the UK’s biggest companies largely rely on personal networks to identify new board members with most roles being un-advertised, the study by the Equality and Human Rights Commission (EHRC) found.

The study which looked at appointment practises in the UK’s largest 350 listed firms, which make up the FTSE 100 and FTSE 250, found more than 60% had not met a voluntary target of 25% female board members.

This news comes months after a recent report announced there were no longer any solely male boards in the UK’s FTSE 100 companies.

Other findings in the report were:
  • Men outnumber women in senior positions in the FTSE 350 by a ratio of around 4:1
  • Three quarters of FTSE 350 companies have two or fewer women on their boards
  • Nearly three quarters of FTSE 100 companies have no female executive director and 90% of the FTSE 250 have no female executive directors
  • Companies with no women on their boards are more than twice as likely to rely on personal networks to fill roles
Read more here.

4. UK inflation rate stays at 0.3%

UK inflation as measured by the Consumer Prices Index was unchanged at 0.3% in February according to the Office for National Statistics.

The largest downward contribution came from the transport sector, while rising food prices, particularly vegetables, offset this. Goods annual inflation in February was -1.6%, while services annual inflation was 2.4%.

David Kern, Chief Economist at the BCC, commented:
“The rebound in oil prices in recent weeks, and gradual increases in wages, are likely to push inflation slightly higher over the next few months, but we expect the annual rate to remain below 1% until the final months of this year, with the 2% target not met until the end of 2017.”

Mike Ashton, Chief Executive of Herefordshire and Worcestershire Chamber of Commerce, said:
“The Monetary Policy Committee can afford to continue taking a relaxed view and maintain interest rates as they are for now. Sustaining economic recovery must be the main priority for the UK at the present.”