The latest GDP data released on the 12/08/22 has shown a 0.1% fall in GDP between April and June. This data is concerning for the British economy as we move into to the winter recession the Bank of England has forecasted. This GDP data supports this forecast. Households are already being hit by rising inflation and rising interest rates, and the cost-of-living crisis remains bleak viewing for households across the country with the utility tariff cap increasing in the autumn. Rising inflation is significantly impacting business profits and their ability to invest in long term growth.
However, there is cause for optimism in the recent GDP figures as business investment rose by 3.8%, however these figures have been erratic in recent months and remains 6% lower than pre COVID figures. Furthermore, other consumer sectors such as tourism, hospitality and entertainment have benefited from the easing of COVID restrictions and have showed strong growth. As long as availability of labour and supplies this will only increase further as we ease out of the pandemic restrictions.
The Ukraine war has contributed to poor trade performance with another record trade deficit. Exports were £27.9bn lower than imports on this measure of the underlying strength, with a gap representing 4.5 per cent of national income, the highest since comparable records began in 1997. Should you require support with International Trade or need the chamber to lobby central government on your behalf this is something you can discuss with the International Trade and Policy teams at the Chamber.
The Quarterly Economic Survey is a direct method of reporting business performance and confidence. The next survey is running 22nd August to 12th September.